CHP in Hospitals –Improving Resilience and

Lowering Energy Costs

Shawn Jones – Pacific CHP TAPGavin Dillingham, PhD –Southwest CHP TAP

December 7, 2016

Agenda CHP Overview – Pacific CHP TAP

CHP is a Great Fit for Hospitals – Pacific CHP TAP

CHP in Hospitals Examples – Pacific CHP TAP

CHP Deployment - Industry Perspective – Solar Turbines

CHP Project Services from DOE CHP TAPs- SW CHP TAP

Q&A

Thank You

U.S. DOE CHP Deployment Program Market Analysis and Tracking – Supporting analyses of CHP market

opportunities in diverse markets including industrial, federal, institutional, and commercial sectors.

Technical Assistance through DOE's CHP Technical Assistance Partnerships (CHP TAPs) – Promote and assist in transforming the market for CHP, waste heat to power, and district energy with CHP throughout the United States

Just Launched Combined Heat and Power (CHP) for Resiliency Accelerator - Collaborating with Partners to support consideration of CHP and other distributed generation solutions for critical infrastructure resiliency planning at the state, local, and utility levels

Packaged CHP System eMarket Initiative (under development) -

Increase CHP deployment in underdeveloped markets with standardized, and warrantied packaged CHP systems driven by strong end-user engagement via Market Mover Partners, such as cities, states, and utilities

www.energy.gov/chp

CHP Technical Assistance Partnerships

Education and OutreachProviding information on the energy and non-energy benefits and applications of CHP to state and local policy makers, regulators, end users, trade associations, and others.

Technical AssistanceProviding technical assistance to end-users and stakeholders to help them consider CHP, waste heat to power, and/or district energy with CHP in their facility and to help them through the development process from initial CHP screening to installation.

Market Opportunity AnalysisSupporting analyses of CHP market opportunities in diverse markets including industrial, federal, institutional, and commercial sectors

CHP Overview

CHP: A Key Part of Our Energy Future Form of Distributed Generation

(DG)

An integrated system

Located at or near a building / facility

Provides at least a portion of the electrical load and

Uses thermal energy for:

o Space Heating / Cooling

o Process Heating / Cooling

o Dehumidification

CHP provides efficient, clean, reliable, affordable energy –

today and for the future.

Source: www.energy.gov/chp

Fuel 100 units

CHP75% efficiency

Total Efficiency~ 75%

Fuel

Fuel

30 units

Power Plant32% efficiency(Including T&D)

Onsite Boiler80% efficiency

45 units

Electricity

Heat

Total Efficiency~ 50%

94 units

56 units

30 to 55% less greenhouse gas emissions

CHP Recaptures Heat of Generation, Increasing Energy Efficiency, and Reducing GHGs

Common CHP Technologies

50 kW 100 kW 1 MW 10 MW 20 MW

Fuel Cells

Gas TurbinesMicroturbines

Reciprocating Engines

Steam Turbines

CHP System Schematic

Prime MoverReciprocating EnginesCombustion Turbines

MicroturbinesSteam Turbines

Fuel CellsORC turbine

ElectricityOn-Site Consumption

Sold to Utility

FuelNatural Gas

PropaneBiogas

Landfill GasCoal

SteamWaste Products

Others

Generator

Heat Exchanger

ThermalSteam

Hot WaterSpace Heating

Process HeatingSpace Cooling

Process CoolingRefrigeration

Dehumidification

What Are the Benefits of CHP? CHP is more efficient than separate generation

of electricity and heating/cooling

Higher efficiency translates to lower operating costs (but requires capital investment)

Higher efficiency reduces emissions of pollutants

CHP can also increase energy reliability and enhance power quality

Critical Infrastructure and Resiliency Benefits of CHP

“Critical infrastructure” refers to those assets, systems, and networks that, if incapacitated, would have a substantial negative impact on national security, national economic security, or national public health and safety.”Patriot Act of 2001 Section 1016 (e)

Applications: Hospitals and healthcare centers Water / wastewater treatment plants Police, fire, and public safety Centers of refuge (often schools or

universities) Military/National Security Food distribution facilities Telecom and data centers

CHP (if properly configured):

Offers the opportunity to improve Critical Infrastructure (CI) resiliency

Can continue to operate, providing uninterrupted supply of electricity and heating/cooling to the host facility

Emerging National Drivers for CHP Benefits of CHP recognized by

policymakerso State Portfolio Standards (RPS, EEPS), Tax Incentives,

Grants, standby rates, etc.

Favorable outlook for natural gas supply and price in North America

Opportunities created by environmental drivers

Utilities finding economic value Energy resiliency and critical

infrastructure

DOE / EPA CHP Report (8/2012)

http://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_clean_energy_solution.pdf

CHP Today in the United States

Source: DOE CHP Installation Database (U.S. installations as of December 31, 2015)

82.7 GW of installed CHP at over 4,400 industrial and commercial facilities

8% of U.S. Electric Generating Capacity; 14% of Manufacturing

Avoids more than 1.8 quadrillion Btus of fuel consumption annually

Avoids 241 million metric tons of CO2 compared to separate production

Finding the Best Candidates:Some or All of These Characteristics

High and constant thermal load Favorable spark spread Need for high reliability Concern over future electricity prices Interest in reducing environmental impact Existing central plant Planned facility expansion or new construction; or

equipment replacement within the next 3-5 years

CHP in Hospitals

Practical◦ Hospitals with installed CHP systems experience reduced operating costs and higher reliability of

continued service

Proven◦ Over 200 hospitals and medical campuses nationwide currently operate CHP systems

Economical◦ Efficient CHP systems can lead to attractive investments with electric and thermal energy savings,

especially in areas with high electric rates and lower natural gas costs

Reliable◦ In contrast to emergency generators that may not able to operate as expected over the full duration

of an outage, several facilities with CHP were able to maintain both power and heat during storms and other climate events, providing a “dynamic asset” with an economic return running every day

Clean◦ High efficiency, low emissions CHP systems have been recognized as the centerpiece of sustainability

strategies at premier hospital and university campuses.◦ A hospital can reduce its greenhouse gas impacts by almost 20% with a single investment in high

efficiency CHP

Hospitals are Ideal Candidates for CHP

CHP is PRACTICAL for Hospitals 24/7 operations Significant and coincidental needs for electric

power, heating, and cooling Requirement for high power quality and

reliability of continued service Hospitals with installed CHP systems

experience reduced operating costs

Existing CHP in U.S. Hospitals201 facilities generating 847 MW

Source: DOE CHP Installation Database (U.S. installations as of Dec. 31, 2015)

CHP in Hospitals

Source: DOE CHP Installation Database (December 2015) and US DOE CHP Technical Potential (March 2016)

0

100

200

300

400

500

600

700

800

900

Capa

city

(MW

)

Year

CHP Capacity in US Hospitals

Capacity(MW)

201 hospitals have CHP, totaling 846.5 MW of capacity.

Further technical potential totaling 6,240 MW of generating capacity

CHP is PROVEN for Hospitals201 CHP Sites with 846.5 MW Generating Capacity

Fuel Type Sites MWBiomass 10 13.4Coal 2 10.0Natural Gas 164 725.3Oil 13 37.1Waste 8 57.5Wood 3 1.8Other 1 1.5Total 201 846.5

Size Range Sites MW< 1 MW 91 32.61 – 4.9 MW 75 193.95 – 19.9 MW 27 239.520 – 49.9 MW 5 157.750 – 99.9 MW 3 222.8Total 201 846.5

Technology Sites MWBackpressure Steam Turbine 6 2.4Boiler/Steam Turbine 21 205.8Combined Cycle 9 208.5Combustion Turbine 39 272.0Reciprocating Engine 110 148.9Fuel Cell 5 3.2Microturbine 10 4.2Other 1 1.5Total 201 846.5

22

Table: Size RangeTable: Prime Mover Technology

Table: Fuel Type

Source: DOE/ICF CHP Installation Database (December 2015)

CHP is PROVEN for Hospitals44 CHP Sites and 177 MW of Capacity in CA Alone

Source: DOE/ICF CHP Installation Database (December 2015)

0

20

40

60

80

100

120

140

160

180

200

CA NY MA PA TX RI MN CT FL IL MD NJ

Site

s/Ca

paci

ty

State

CHP Application in US Hospitals by State

# of Sites

Capacity(MW)

Technical Potential for Hospitals

50-500 kW .5-1 MW 1-5 MW 5-20 MW >20 MWNumber of Sites 2946 1177 2001 112 4Capacity (MW) 716 815 4124 758 900

2946

1177

2001

112

4

716 81

5

4124

758 90

0

US TECHNICAL POTENTIAL FOR HOSPITALSNumber of Sites Capacity (MW)

Pacific CHP TAP Hospital Technical Potential

- 50 100 150 200 250 300 350 400 450

Nevada

Hawaii

California

Number of Potential CHP Sites

CHP Technical Potenital in Hospitals

50-500 kW 0.5 - 1 MW 1 - 5 MW

489 Potential CHP Sites and 624 MW of Capacity

Southwest CHP TAP Hospital Technical Potential

1.093 Potential CHP Sites and 1,140 MW of Capacity

- 100 200 300 400 500 600 700

Wyoming

Utah

Texas

Oklahoma

New Mexico

Colorado

Arizona

Number of Potential CHP Sites

CHP Technical Potenital in Hospitals

50-500 kW 0.5 - 1 MW 1 - 5 MW

Sizes TYPICALLY range from 100s of kWs to several MWs (depending on facility size and usually below 10 MW)

Common CHP prime mover types in hospitals are reciprocating engines, combustion turbines, and/or steam turbines (mostly fueled by natural gas)

Most hospital CHP systems are sized for the thermal load requirements with the resulting electric power generated used to first offset the power purchased from the utility grid (excess power can be sold to the utility)

CHP systems do not replace the need for emergency generator sets to meet the “life critical loads” of a hospital

◦ Can reduce the number and capacity of the emergency generators

◦ Can increase the total electric reliability for the hospital

Typical Hospital CHP System Configurations

Source: http://www.midwestcleanenergy.org/Archive/pdfs/USHospitalGuidebook_111907.pdf

Healthcare organizations spend > $6.5B annually

Every $1 a non-profit healthcare organization saves on energy is equivalent to generating $20 in new revenues for hospitals

For-profit hospitals can raise their earnings per share 1¢ by reducing energy costs just 5%

By being more energy efficiency and saving money, hospitals can reinvest savings from improved energy performance

201 hospitals operate CHP systems today

7 of Top 16 U.S. hospitals use CHP according to US News

CHP is ECONOMICAL for Hospitals

1) ENERGY STAR - http://www.energystar.gov/ia/partners/publications/pubdocs/Healthcare.pdf2) DOE CHP Installation Database3) US News’ 2013-2014 Honor Roll of the Nation’s Top 18 Hospitals:(John Hopkins, Mass. General, Mayo Clinic, Cleveland Clinic, NY Presbyterian, NYU Langone, Indiana University)

Direct Ownership Financing Optionso Cash paymentso Bank loanso Bond financing

Third Party Ownership (TPO) Optionso Lease Financing (a traditional method of financing equipment – “off-balance sheet financing”)o Energy Service Agreements (ESAs) o Power Purchase Agreements (PPAs)

Financing Options for Hospitals

Source: http://www.greenribboncommission.org/downloads/CHP_Guide_091013.pdf

High efficiency, low emissions CHP systems have been recognized as the centerpiece of sustainability strategies at premier hospital and university campuses.

A hospital can reduce its greenhouse gas emissions by almost 20% with a single investment in high efficiency CHP

CHP is CLEAN

Source: http://www.midwestcleanenergy.org/Archive/pdfs/USHospitalGuidebook_111907.pdf

CHP is RELIABLE Recent extreme weather events have turned attention to

energy reliability and business continuity, disrupting electric distribution systems and exposing fragilities in our back-up power systems

Emergency generators may not be able to operate as expected over the full duration of an outage, several facilities with CHP systems were able to maintain both power and heat during these storms and other events, providing a “dynamic asset” with an economic return running every day

Designing for ReliabilityTwo Generator Types Induction

◦ Requires external power source to operate◦ When grid goes down,

generator goes down◦ Less Complicated and Costly

to Interconnect Synchronous (preferred)

◦ Self Excited (Does not need grid to operate)

◦ Generator can operate thru Grid outages

◦ More Complicated and Costly to Interconnect

Uninterrupted Operation Requirements Black start capability

◦ Allows the system to start up independently from the grid

Generators capable of grid-independent operation◦ The system must be able to operate

without grid power signal Ample Carrying Capacity

◦ System size must match critical loads Parallel utility interconnection

and switch gear controls◦ The system must be able to

disconnect from the grid, support critical loads, and reconnect after an event

Emergency Generators Minimum requirement, sized to meet

“life critical loads Hospitals are installing larger

generators to protect more and more hospital loads

Diesel fueled – high emissions & limited amount of stored fuel (hours versus days of operation)

Not designed or capable of continuous operation for long periods of time – rarely operates

Financial payback only in times of emergency

Emergency Generators vs. CHP Systems

CHP Systems

Sized to meet thermal or electric loads – operates continuously to meet those loads

Natural gas fueled – low emissions

Does not replace emergency generator set for “life critical” loads

Reduces overall size and capacity of emergency generator sets

Emergency generator sets become backup to the backup; much higher reliability

Good financial return

CHP Projects in Hospitals

Project Snapshot: Reliability

San Diego VA Hospital San Diego, CA

Capacity: 6.8 MW Fuel: Natural GasPrime Mover: 4.6 MW Solar Turbines Mercury™ 50 gas turbine, absorption chiller Installed: 2005Total Project Cost: $4 M Yearly Energy Savings: $1-1.5 M

“The Mercury 50 gas turbine was an ideal fit for the hospital because of its recuperated exhaust heat design. I’ve been very impressed with the reliability and I’ve been very happy with the system.”

- Bill Dias, Assistant Chief/Operations Engineer at VASDHS

Project Snapshot: Utilities Expansion

Northwest Community HospitalArlington Heights, IL

Capacity: 4.6 MW Fuel: Natural GasPrime Mover: Recip. EnginesInstalled: 1997 / 2005

"We said, ‘Well, if we're going to centralize it all, doesn't it make sense to do a CHP—and generate our own electricity, to reduce our demand load, and then capture the heat of those engines and utilize all that for heating and/or cooling?' "

Charlie Stevenson, Director of Plant OperationsNorthwest Community Hospital

"The beauty of this CHP to him was not simply the return for the cogen system, but the fact that these savings would pay for the central energy plant too.”

Joe Sinclair, Ballard Engineering

Project Snapshot: Waste Heat Recovery

Kaiser Permanente Vacaville Medical CenterVacaville, CA

Capacity: 3 MW Fuel: Natural GasPrime Mover: 750 kW (Twelve 65-kw Capstone C-65 microturbines with heat recovery)Installed: 2009Total Project Cost: $1.7 M Yearly Energy Savings: $500,000+

All 12 microturbines operate 24 hours per day, seven days a week. The medical center load is large enough even at low load conditions to support the need for all the turbines.

Project Snapshot: Disaster Relief, Hurricane Katrina

Mississippi Baptist Medical CenterJackson, MS

Capacity: 4.2 MW Fuel: Natural GasPrime Mover: Combustion TurbinesInstalled: 1991

The independence provided by the CHP system allowed MBMC to continue operation relatively unaffected during

Hurricane Katrina in 2005. As soon as power reliability became a factor MBMC performed a load shed, switched off

of the power grid, and continued operation in turbine-only mode. MBMC was the only hospital in the Jackson metro

area to remain nearly 100% operational. After approximately 50 hours, the power reliability issue was addressed

and MBMC connected to the power grid and returned to normal operation.

Project Snapshot: Thermal Savings

St. Helena HospitalSt. Helena, CA

Capacity: 1.2 MW Fuel: Natural GasPrime Mover: 400-kW phosphoric acid fuel cell unit (PureCell Model 400)Installed: 2010Total Project Cost: $2.15 M Yearly Energy Savings: $170,000+

“Fuel cells are a great choice for businesses that have 24/7 operational needs and the capability to maximize utilization of both the power and the heat generated.“

- Stan Tempchin, Director of Facilities

Project Snapshot: LEED Platinum

Dell Children’s Medical Center of Central TexasAustin, TX

Capacity: 4.6 MW Fuel: Natural GasPrime Mover: Combustion TurbinesInstalled: 2009

First healthcare facility in the world to achieve a LEED Platinum certification by the U.S. Green Building Council (USGBC)

Solar Turbines

How to Implement a CHP Project with the Help of the CHP TAP

CHP TAP Technical Assistance

High level assessment to determine if site shows potential for a CHP project◦ Qualitative Analysis

– Energy Consumption & Costs

– Estimated Energy Savings & Payback

– CHP System Sizing

◦ Quantitative Analysis– Understanding project drivers

– Understanding site peculiarities

DOE TAP CHP Screening AnalysisAnnual Energy Consumption

Base Case CHP Case

Purchased Electricty, 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

Annual Operating Costs

Purchased Electricity, $ $7,060,013 $1,104,460 Standby Power, $ $0 $0 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

Annual Operating Savings, $ $2,445,499 Total Installed Costs, $/kW $1,400 Total Installed Costs, $/k $12,990,000 Simple Payback, Years 5.3

Operating Costs to Generate

Fuel Costs, $/kWh $0.070 Thermal Credit, $/kWh ($0.037) Incremental O&M, $/kWh $0.009

Total Operating Costs to Generate, $/kWh $0.042

Do you pay more than $.06/kWh on average for electricity (including generation, transmission and distribution)?

Are you concerned about the impact of current or future energy costs on your operations?

Are you concerned about power reliability? What if the power goes out for 5 minutes… for 1 hour?

Does your facility operate for more than 3,000 hours per year? Do you have thermal loads throughout the year?

(including steam, hot water, chilled water, hot air, etc.)

Screening Questions

Does your facility have an existing central plant? Do you expect to replace, upgrade, or retrofit central plant

equipment within the next 3-5 years? Do you anticipate a facility expansion or new construction project within

the next 3-5 years? Have you already implemented energy efficiency measures and

still have high energy costs? Are you interested in reducing your facility's impact on the

environment? Do you have access to on-site or nearby biomass resources?

(i.e., landfill gas, farm manure, food processing waste, etc.)

Screening Questions (cont.)

CHP Project ResourcesGood Primer Report DOE CHP Technologies

Fact Sheet Series

www.eere.energy.gov/chpwww.energy.gov/chp-technologies

CHP Project ResourcesDOE Project Profile Database

(150+ case studies)

www.eere.energy.gov/chp-profiles

DOE Database of Incentives & Policies (DSIRE)

www.dsireusa.org

CHP Project ResourcesDOE CHP Installation Database

(List of all known CHP systems in U.S.)

No-Cost CHP Screening and Other Technical Assistance from

the CHP TAP

www.eere.energy.gov/chp-installs www.eere.energy.gov/chp-contacts

Next StepsResources are available to assist in developing CHP Projects.

Contact the DOE CHP TAPs to:

Perform CHP Qualification Screening for a particular hospital

Identify existing CHP in hospital sites for new Project Profiles

Need an unbiased 3rd Party Review of a CHP proposal

Request a feasibility study to determine CHP sizing, savings

CHP plays a key role in hospitals by providing energy savings, reduced emissions, and opportunities for resiliency

Emerging economic and environmental drivers are creating new opportunities to evaluate CHP and numerous examples exist to learn more about how other hospitals have incorporated CHP

Engage with the US DOE CHP TAPs to learn more about the technical assistance offerings in evaluating CHP for your facility

Summary

Questions??Shawn Jones, Project ManagerDOE Pacific CHP TAPshawn.jones@energycenter.org858-633-8739

Gavin Dillingham, PhD, DirectorDOE Southwest CHP TAPgdillingham@harcresearch.org281-216-7147

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