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CHP Project Costs Screening . Public Utility Commission of Ohio Combined Heat and Power: Financial Tools Workshop Columbus, OH August 2, 2012 Cliff Haefke. www.midwestcleanenergy.org. Outline. CHP project development process Qualifying a CHP system CEAC technical assistance. - PowerPoint PPT Presentation
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www.midwestcleanenergy.orgwww.midwestcleanenergy.org
CHP Project Costs Screening
Public Utility Commission of Ohio
Combined Heat and Power: Financial Tools Workshop Columbus, OH
August 2, 2012Cliff Haefke
o CHP project development process
o Qualifying a CHP system
o CEAC technical assistance
Outline
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o U.S. DOE Midwest Clean Application Center originally established in 2001 by U.S. DOE and ORNL to support DOE CHP Challenge
o Today the 8 Centers promote the use of CHP, District Energy, and Waste Heat Recovery Technologies
o Strategy: provide a technology outreach program to end users, policy, utility, and industry stakeholders focused on:
– Market analysis & evaluation– Education & outreach– Technical assistance
o Midwest Website: www.midwestcleanenergy.org
US DOE Regional Clean Energy Application Centers (CEACs)
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Advantages & Benefits of CHP
o Remember… CHP does not make sense in every application, but when it does, it can provide the following benefits
– Lower energy costs
– Reduced energy consumption
– Increased electric reliability
– Standby power
– Improved environmental quality
– Good public relations
– And more…
o All buildings and market sectors are not identical in terms of
– Energy consumption
– Energy demands
– Operating schedules
– Size of facilities
– Geographic location
– Electric and natural gas utilities
– Environmental concerns
o Therefore… it’s important to evaluate facilities individually!
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Evaluating Facilities on an Individual Basis
CHP Process Development Steps
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Site Request
CHP Qualification
Feasibility Study
Investment Grade Analysis
Procurement Installation Operation
o Do you pay more than $.06/kWh on average for electricity (including generation, transmission and distribution)?
o Are you concerned about the impact of current or future energy costs on your business?
o Are you concerned about power reliability? Is there a substantial financial impact to your business if the power goes out for 1 hour? For 5 minutes?
CHP Qualification Questions
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o Does your facility operate for more than 5000 hours per year?
o Do you have thermal loads throughout the year (including steam, hot water, chilled water, hot air, etc.)?
o Does your facility have an existing central plant?
CHP Qualification Questions (2)
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o Do you expect to replace, upgrade, or retrofit central plant equipment within the next 3-5 years?
o Do you anticipate a facility expansion or new construction project within the next 3-5 years?
o Have you already implemented energy efficiency measures and still have high energy costs?
CHP Qualification Questions (3)
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o Are you interested in reducing your facility's impact on the environment?
o Do you have access to on-site or nearby biomass resources (i.e. landfill gas, farm manure, food processing waste, etc.?
CHP Qualification Questions (4)
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Attractive CHP Markets
Industrialo Chemical
manufacturingo Ethanolo Food processingo Natural gas
pipelineso Petrochemicalso Pharmaceuticalso Pulp and papero Refiningo Rubber and plastics
Commercialo Data centerso Hotels and casinoso Multi-family housingo Laundrieso Apartmentso Office buildingso Refrigerated
warehouseso Restaurantso Supermarketso Green buildings
Institutionalo Hospitalso Landfillso Universities &
collegeso Wastewater
treatmento Residential
confinement
Agriculturalo Concentrated
animal feeding operations
o Dairieso Wood waste
(biomass)
o Facility data and industry information
o Facility motivation for CHP
o Electric/thermal loads, needs, and costs
o Major HVAC, electric, and thermal (heating & cooling) equipment
Collecting Site Information for a CHP Evaluation
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Example Screening CalculationLoads & Assumptions
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Site Characteristics Value
Facility Type Hospital
Annual Hours of Operation, hrs 8,520
Average Power Demand, MW 10.4
Average Thermal Demand, MMBtu/hr 50.0
Thermal Fuel Costs, $/MMBtu 6.00
CHP Fuel Costs, $/MMBtu 6.00
Average Electricity Costs, $/kWh 0.08
Percent Electric Price Avoided* 90%
* Typically 70-95%
Example Screening Calculation (2)CHP System Assumptions
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CHP System Values
Net CHP Power, MW (based on thermal match) 10.2
CHP Electric Efficiency, % (HHV) 29.1%
CHP Thermal Output, Btu/kWh 4,922
CHP Availability, % 96%
Incremental O&M Costs, $/kWh 0.009
Displaced Thermal Efficiency, % 80.0%
CHP Thermal Utilization 100.0%
Example Screening Calculation (3)Annual Energy Results
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Base Case CHP Case
Purchased Electricity, kWh 88,250,160 5,534,150
Generated Electricity, kWh 0 82,716,010
On-Site Thermal, MMBtu 426,000 18,872
CHP Thermal, MMBtu 0 407,128
Boiler Fuel, MMBtu 532,500 23,590
CHP Fuel, MMBtu 0 969,845
Total Fuel, MMBtu 532,500 993,435
Example Screening Calculation (4)Annual Operating Costs & Simple Payback
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Annual Operating Costs Base Case CHP Case
Purchased Electricity, $ $7,060,013 $1,104,460
On-Site Thermal Fuel, $ $3,195,000 $141,539
CHP Fuel, $ $0 $5,819,071
Incremental O&M, $ $0 $744,444
Total Operating Costs, $ $10,255,013 $7,809,514
Simple Payback Calculations
Annual Operating Savings, $ $2,445,499
Total Installed Costs, $/kW $1,400
Total Installed Costs, $ $14,221,861
Simple Payback, Years 5.8
CHP Market Development – Emerging Driverso Growing recognition of
CHP benefits by state and federal policymakers
o Emissions regulations impacting non-utility boilers
o Upward pressure on electricity prices
o Favorable natural gas outlook
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OH Governor Kasich signing energy Senate Bill 315Source: Akron Beacon Journal Online, 07/2012
CHP Market Development – Emerging Driverso Growing recognition of
CHP benefits by state and federal policymakers
o Emissions regulations impacting non-utility boilers
o Upward pressure on electricity prices
o Favorable natural gas outlook
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CHP Market Development – Emerging Driverso Growing recognition of
CHP benefits by state and federal policymakers
o Emissions regulations impacting non-utility boilers
o Upward pressure on electricity prices
o Favorable natural gas outlook
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45+ GW of Coal Fired Utility Power Plants impacted by
EPA regulations
Upward Pressure on Electricity Prices
Source: ICF International
CHP Market Development – Emerging Driverso Growing recognition of
CHP benefits by state and federal policymakers
o Emissions regulations impacting non-utility boilers
o Upward pressure on electricity prices
o Favorable natural gas outlook
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Henry Hub Gas Prices Will Average Projected Between
$5 and $6 per MMBtu
FavorableNatural Gas Outlook
Gas Prices at Henry Hub (2010$/MMBtu)
Source: ICF International
CHP Assistance from CEACs
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Site Request
CHP Qualification
Feasibility Study
Investment Grade Analysis
Procurement Installation Operation
CEAC Project Support• Over 225 assessments & 700 tech
support activities• Represents over 1.5 GW installed
or in development
CEAC Capabilities• Qualification thru Feasibility Analysis• Consulting Expertise thru all Steps• Bringing customers and CHP
engineering community together
Thank YouCliff Haefke
(312) [email protected]
www.midwestcleanenergy.org
A program at A program sponsored by
