Transcript Slide 1

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Combined Heat and Power (CHP)
ENERGY 2014
Orlando, Florida
July 23, 2014
Christopher Lindsey
[email protected]
(301) 731-1900 ext. 216
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Presentation Outline
• How to Start Off Right
• Feasibility Study (go/no go)
– Case Study Information
• Development Tips
• You Probably Already Know
– Something about CHP technologies
– Why CHP is important
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Start Right – Energy Measurements
• Measure Your Energy Use!
– Investment Grade Audit by an
INDEPENDENT third party
• Why is this critical?
– Project sizing driven by your energy loads
– Engineering estimates can be problematic
– Oversizing equals underused capital
and lower operating efficiency
– Under sizing equals operational issues
and reduced savings.
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Start Right – Energy Measurements
• Know your thermal energy loads in as much
detail as you can afford
– You will NEVER regret good information about your loads
– If your meters or submeters don’t work – fix them
– If you don’t have meters – consider data logging for a
limited time – budget for it!
– If you have distribution/condensate system problems –
know what is fixable and what is not
– Understand existing steam/hot water boiler
performance as best as possible
– Make a list of thermal energy savings measures that
might be good to implement before CHP project
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Start Right – Energy Measurements
• Know your electrical loads
– Try to collect some detailed information
on big loads (like chillers). When did they
run, how much energy being used, etc.
– Ask your utility about interval data
– Consider sub-meters or smart meters
where it makes sense
– Collect data from Building
Management Systems
– Make a list of electrical energy savings
measures needed before CHP project
will be implemented
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Start Right – Energy Measurements
• Cross Check Data
– Develop facility performance
metrics and cross check
results with utility bills,
correct for weather
– That includes:
• Electric
• Gas
• Fuel Oil
• and Water!
– Good time to cross check bill
against interval data too
Hopefully it won’t
be as hard as this
guy thinks it is
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Start Right – Energy Measurements
• But isn’t this the ESCO’s problem?
• Don’t you believe it!
– Energy Service Agreements may have minimum take
requirements, protections against energy cost changes or
other clauses that place risk back onto host
– When major things go wrong ESCO may or may not be on
the hook to fix them (contract).
• Load/operational changes
• Facility side equipment failures
– What about ESCO bankruptcy / financial trouble?
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Warning
Litigation: A machine
which you go into as
a pig and come out
of as a sausage.
– Ambrose Bierce
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Step 1 – Feasibility Study
• Key Elements
– Define Objectives/Standards
– Review Energy Loads
– Preliminary Techno/Economic Screening
– Selection of Technologies for Analysis
– Detailed Performance Estimate
– Life Cycle Cost Analysis
– Technology Selection (Go/No Go)
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Renewable Energy Targets - Sample
FY 13 Electricity Consumption
16,810 MWh
EPACT Mandate (2013 and beyond)
Renewable Energy Purchase (7.5%)
1,261 MWh
On-site Renewable Energy Generation (3.75%)
630 MWh
Renewable Energy Targets from Presidential Memorandum
2015 Target: Renewable Energy Purchase (10%)
On-site Renewable Energy Generation (5%)
2020 Target: Renewable Energy Purchase (20%)
On-site Renewable Energy Generation (10%)
1,681 MWh
840.5 MWh
3,362 MWh
1,681 MWh
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Thermal Load
Analysis
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Electric Load Analysis
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Screening Analysis/Selection
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Detailed Performance Estimate
• Detailed bin or 8760 hourly analysis
• Back-up energy supply requirements
• Detailed review of tariff impacts
– Special attention to change in tariff and demand
charge changes
• Detailed review of environmental/regulatory
changes
– DEC, Historic Preservation, habitat
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Small CT Example
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GHG Analysis
Net GHG Emissions Change (MT CO2e)
Option 1
Option 2
Option 3
Option 4
Scope 1
Scope 2
2,876
2,146
3,219
3,917
-5,053
-2,481
-4,444
-7,856
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Life Cycle Cost Analysis
• More than ENERGY SAVINGS!
• For Federal Facilities
– Typically use BLCC guidance which dictates
• Discount rates
• Inflation rates
• Escalation rates for electricity and natural gas
• Includes Status Quo
• Alternative Financing Option Review
– UESC, EUL, ESCO, Direct Fund
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This is not an LCCA
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Final Selection
• MUST PRIORITIZE WHAT’S IMPORTANT
– Economics (usually, but not always)?
– Meeting Agency/Facility energy intensity, GHG,
sustainability goals?
– Improved operations?
– Showcase?
• WARNING – if Economics – be sure to review
the economic assumptions carefully!
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EIA Gas/Electricity Prices
Annual escalation ~ 2% per year
@ 3%, 2040 would equal 31 cents/kWh
In some states, actual escalation over past 20 years was less
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So You Think You Have a Project…
• Ideally Feasibility Study will be used to
generate bid specification documents
• Start RFP process
• Selecting a Contractor
• Negotiating Contract
• Construction, Start-up
• YEAR 1 Operation
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Development Tips
• Use and Independent Engineer even if
planning a Turnkey-EPC type project
– Feasibility Study
– Design (maybe)
– Commissioning
– Monitoring and Verification
– Arbitration/Litigation
• Get input from your O&M staff and make
them stakeholders in the entire process
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Development Tips
• Understand ALL of the possible project
development options
– Third party ESA has lots of advantages-but there
are other options
– Design/Build, Build Own Operate Transfer?
• Understand project risks and your tolerance
– How different is the new project from what you
your O&M staff are used to dealing with
– Is this a bleeding edge technology (plasma-arc
waste gasification with a recip engine?)
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Contract, Contract, Contract
• IF YOU ARE GOING TO OWN IT - write
an Owner’s Requirement Document
that provides cover
• Understand your contract leverage,
how it changes over time--be stingy
• Change Orders should be limited to
cosmetic, minor things YOU change
your mind on
• Understand minimum takes, price risk
pass through, warranty claim
limitations, contractor liability.
• SPEND SOME MONEY HERE!
Early in Project
Owner
PAID
Contractor
OUT
Late in Project
Owner
Contractor
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Contract, Contract, Contract
• If you are not going to own it…
– Think like a banker!
– Imagine the unimaginable (both sides of fence)
• Strikes, natural disasters, Contractor financial trouble
• Not everything you think of will be reasonable to
protect against, but not everything you do won’t
– Protect yourself for performance failures
• Ensure you can walk away or control your fate
• Be prepared for ligation
– What is your back-up plan if Contractor pulls the
plug or “new” system fails?
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What about Biomass CHP?
•
•
•
•
•
Can accommodate a baseload
Geographically diverse resource
Can be cost competitive
Well established options/technologies
RENEWABLE Energy Mandates
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Biomass CHP in the US-for now
• District heating – displace higher cost fuels such as
#2 oil with woody biomass
• For C&I applications (< 5 MW, i.e. hospital, college /
university, manufacturing facility)- Close coupled
gasifiers with medium pressure steam driving back
pressure steam turbine
• For larger C&I applications (> 5 MW, i.e. pulp mill,
large district heating system) – Fixed bed / fluidized
bed gasifiers with higher pressure steam
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What Biomass Fuel Are You Using?
As Received Basis
Sample Type
Sawdust (Green)
Poultry Litter
Whole Tree Chip
Willow Energy Crop
Corn Stover
Stumpage
Ground Pallets
C&D Debris
Switchgrass
Sawdust (Dry)
RTA Wood
Wax Cardboard
Btu/lb*
4,150
4,637
5,229
6,044
6,385
6,647
6,814
6,939
7,370
7,379
7,864
10,065
MCW^
52.63
27.40
38.68
29.13
22.00
9.82
19.18
18.77
7.88
11.40
7.04
14.08
Carbon
24.17
27.22
32.35
35.61
36.27
40.77
42.13
42.91
44.70
45.18
46.19
42.92
Hydrogen
2.75
3.72
3.68
3.60
4.53
4.39
4.95
5.11
5.57
5.34
4.98
7.98
Nitrogen
0.22
2.69
0.28
0.33
0.44
0.57
0.34
0.36
0.29
0.40
3.27
0.18
Sulfur
0.02
0.33
0.02
0.02
0.09
0.06
0.03
0.06
0.05
0.07
0.08
0.20
Ash
1.96
15.70
0.71
1.33
5.77
14.99
0.80
0.88
4.53
2.51
0.97
1.56
* Higher Heating Value
^ Moisture Content Wet Basis
• Runaway if someone tells you that their
technology works equally well with any fuel!
Oxygen
18.25
23.10
24.28
29.98
30.94
29.40
32.57
31.91
36.98
35.10
37.47
33.08
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Conclusions
• CHP projects can be a viable opportunity
• Usually
– Require high electricity prices, lowish gas
prices to make work (spark spread)
– Best projects in the presence of good
information about loads (current, planned)
– Lots of options to choose from – pick one that
is appropriate to your operation
– The more level your steam load – the better
– Get outside help if you can
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Conclusions
• Biomass is a special case
– Need the space
– Higher O&M
– Works best displacing fuel
oil or high priced gas
– Longer development time
• Make sure to include the
“hassle factor”
• Brace yourself for Year 1
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