chp project costs screening
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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 PresentationTRANSCRIPT
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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
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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…
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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
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CHP Process Development Steps
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Site Request
CHP Qualification
Feasibility Study
Investment Grade Analysis
Procurement Installation Operation
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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)
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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%
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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%
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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
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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
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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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OH Governor Kasich signing energy Senate Bill 315Source: Akron Beacon Journal Online, 07/2012
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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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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
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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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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
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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
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Thank YouCliff Haefke
(312) [email protected]
www.midwestcleanenergy.org
A program at A program sponsored by