Combined Heat & Power:A Federal Manager’s Resource Guide

Final Report

Prepared for:U.S. Department of EnergyFederal Energy Management ProgramWashington, DC

Prepared by:Aspen Systems CorporationApplied Management Sciences Group2277 Research BoulevardRockville, MD 20850

March 2000

Table of Contents

Abstract ........................................................................................................................................1

2.0 The Technologies of Combined Heat and Power..........................................................................2

3.0 Federal Sector Potential ................................................................................................................9

4.0 Applications ................................................................................................................................10

5.0 Technology Performance ............................................................................................................14

6.0 Combined Heat and Power Case Studies....................................................................................16

7.0 Outlook for CHP Technology: Strategies for Success ................................................................19

8.0 Federal Program Contacts...........................................................................................................21

9.0 Manufacturers and Additional Sources of Information ..............................................................22

Appendices

Appendix A: Former Federal Combined Heat and Power Sites .................................................24

Appendix B: Federal Life-Cycle Costing Procedures and the BLCC Software.........................25

Appendix C: Acronym Glossary.................................................................................................26

ii

CombinedHeat and

Power:A Federal

Manager’sResource

Guide

AbstractExecutive Order 13123 Green-

ing the Government Through Efficient Energy Management,identifies in Section 403(g) thatFederal facilities shall use com-bined cooling, heat and powersystems when life-cycle cost effec-tive to achieve their energy reduc-tion goals. This is a renewedemphasis placed by the Federalgovernment on implementation oftechnologies that achieve overallsystem energy efficiency, reducegreenhouse gas emissions, and trimoperating expenses. FEMP createdCombined Heat and Power: AFederal Manager’s ResourceGuideto assist in this endeavor.

Combined Heat and Power(CHP) is a master term for onsitepower generation technologiesthat simultaneously produce elec-trical or mechanical energy anduseful thermal energy. Cogenera-tion has existed for more than 100 years and is now achieving a greater level of acceptance dueto increased reliability andover-all cost efficiency. Capturing andusing the thermal energy producedas a byproduct from fuel sourcessuch as oil, coal, or natural gas,increases the power gained fromthe original fuel source. CHPtechnologies have the potential to reduce energy consumption—decreasing energy bills, as well as pollution.

Internal combustion enginesand combustion turbines are twoCHP technologies currently usedin industrial, commercial, andgovernment facilities across thenation. Two exciting new CHPtechnologies are fuel cells andmicro-turbines. Fuel cells producepower electrochemically (like abattery) except that they consumefuel (hydrogen) to maintain thechemical reaction. Fuel cells haveno moving parts and provide aquiet, clean, and a highly efficientsource of onsite generation withthermal outputs. Fuel cells pro-duce low levels of pollutants and,although still too expensive formany applications, are slowly becoming economically viable. Micro-turbines are scaled downversions of combustion turbinesthat provide reasonable efficiency,require minimal maintenance,allow fuel flexibility, and have lowemissions. Hybrid systems thatutilize the best features of bothfuel cells and micro-turbines arealso being tested.

Combined Heat and Power:A Federal Manager’s ResourceGuideidentifies the short-,medium-, and long-term potentialof internal combustion engines,combustion turbines, fuel cells,and micro-turbines for Federalfacilities. It outlines successfulapplication procedures for theseCHP technologies and providescase studies of successful imple-mentations. Sources for additionalinformation on CHP technologiesare listed at the end of this Guide.

1

2.0 TheTechnologies ofCombined Heatand Power

Combined Heat and Power(CHP), also known as cogenera-tion, is a system that efficientlygenerates electricity (or shaft pow-er) and takes advantage of the heatthat is normally not used, to pro-duce steam, hot water, and/orchilled water. DOE has estimatedthat about seven percent of the totalelectrical power generation in thiscountry is produced by CHP equip-ment. The Department of Energy(DOE) has recently introduced anew initiative that includes spacecooling to the useful energy out-puts of these combined energy sys-tems, and has designated this asBuildings Cooling, Heating andPower “BCHP.” The specific cool-ing technologies and details of itsapplication will be included in fu-ture editions of this guide.

Figure 2–1 visually depicts theconcept of CHP because the ener-gy input to the system is used to

generate both electrical power anduseful thermal energy.

Long before the energy crisis ofthe 1970s, waste heat from powerplants was used for thermal appli-cations. Thomas Edison’s firstpower plant utilized waste heat forsteam that he sold to help pay gen-erating expenses. Unfortunately,because of central station utilities,the practice of CHP decreased formany generations, even thoughwhen applied well, it significantlyimproved the efficiency of a pow-er plant.

In this new era of electric utilityrestructuring, there is a renewedenthusiasm for CHP, stemmingfrom the promise of lower total lifecycle operating costs, environmen-tal compliance, and system relia-bility. CHP is not limited to onetechnology, but rather is applicableto a growing array of productsdesigned to help Federal facilitiesmeet their onsite generation needs.These proven technologies (inter-nal combustion engines, steamturbines, combustion {gas} tur-bines, fuel cells, micro-turbines)can provide useful thermal energyfor a variety of building applica-tions (see table 2–1) as well as

electricity for base load, peakshaving, or backup situations.

Table 2–1. Waste Heat Applications

Space heating

Domestic hot water heating

Boiler feed-water preheating

Steam generation to supplyturbines (Combined Cycle)

Pool water heating

Steam/hot water for absorptionchiller

Process hot water/steam

Cogeneration is defined by theAmerican Society of Heating, Re-frigerating, and Air ConditioningEngineers (ASHRAE), as the si-multaneous production of electri-cal or mechanical energy (power)and useful thermal energy from asingle energy stream, such as oil,coal, or natural gas. In certain lo-cations, the energy source can beprovided from solar, geothermal or biomass. Several technologiesproduce both electrical energy andthermal energy. This chapter pro-vides an overview of the following:

2.1 Internal Combustion Engines

2.2 Steam Turbines

2.3 Combustion (Gas) Turbines

2.4 Fuel Cells

2.5 Micro-turbines

2.6 Hybrid fuel cell/micro-turbine systems

2.1 Internal CombustionEngine

One of the original cogenerationtechnologies is the reciprocatinginternal combustion (IC) engine.Engine generator sets produceelectricity along with waste heat

2

THERMALOUTPUT

GENERATOR ELECTRICITY

HEAT

FUEL TURBINE,ENGINE ORFUEL CELL

Figure 2–1. Combined Heat and Power System

that can be captured for a varietyof building thermal needs.

IC engines are the fastest grow-ing segment of the small size (1 to10 MW) CHP market for systemsthat use heat diverted to a boiler.IC engines have outsold turbines18-to-1 in the 1 to 5 megawattrange largely because they havehigher electric generating efficien-cies than gas turbines in this sizerange. (Based on DOE studies.)

A large majority of the smallerIC engines use diesel or gasoline to provide backup power to facili-ties during emergency situations orpower outages. Traditionally, thesegenerators were noisy, dirty suppli-ers of electricity without employingthe benefits of heat recovery—exhausting heat directly into theatmosphere instead of capturing itfor useful building purposes.

Today, manufacturers are pro-ducing variously sized (down to25 kW) natural gas-powered,high-output, and highly efficientpackaged cogenerators that areused in a variety of small- tomedium-sized building applica-tions. These modular, quiet, andclean engines are used not only in backup or peak shaving situa-tions, but also to supply base loadelectricity to a growing number of facilities. Packaged IC enginescan provide Federal facilities withthe following (relative to otherCHP technologies):

• Low start-up costs

• Reliable onsite energy

• Low operating costs

• Clean energy

• Ease of maintenance

• Wide service infrastructure

DOE currently sponsors theAdvanced Turbines and Engine

Program (ATEP) to assist industryin developing cleaner, more effi-cient heat engines through fundingfor R&D and prototype testing.Figure 2–2 represents a heat en-gine and the possible efficiencyopportunities that can lead to lower operating costs.

Heat Recovery

Waste heat has never been cap-tured to its potential from smallerIC engines because IC engineswere traditionally used in backup

or peak shaving situations. Today,packaged natural-gas IC enginecogenerators can be made to fitthe specific electric and thermalload profile of the end user, al-lowing for optimal overall plantefficiency.

Of course, not all heat produced during onsite electric generationcan be captured. Small IC cogen-erators can retain about one-halfof the heat produced—Table 2–2illustrates this fact.

3

Figure 2–2. Natural Gas Engine

HIGHTURBOCHARGER

EFFICIENCY

HEATRECOVERY

AIR

FRICTIONREDUCTION

EXHAUSTAFTERTREATMENT

ADVANCEDMATERIALS

ADVANCEDSENSORS &CONTROLS

COMBUSTION

IGNITION

Source: FETC

Table 2–2. IC Engine Generation Process

(Values are approximated. Figures total 100%.Values in bold represent useful energy.)

Without WithHeat Heat

Recovery Recovery

Engine output at flywheel ~ 35% 35%

Un-Recoverable heat 65% 21%

Recoverable heat ~ 0% 44%

Total useful energy 35% 79%

When all recoverable heat isused at a facility, the process can achieve overall efficienciesapproaching 80 percent. Exhaustheat can be utilized in thermalapplications with hot water needsreaching 250 F.

Today’s natural gas IC enginesare a proven technology that offerlow first costs (as a CHP projectinstalled for $800-$1500/kW),uncomplicated start-up, and goodreliability. Emissions have beenreduced significantly in the pastcouple of years thanks to exhaustcatalysts and advancements in thecombustion process. IC enginesare well suited for CHP projects inFederal applications requiring lessthan 10 megawatts.

2.2 Steam TurbinesIn the United States today, most

electricity is generated by conven-tional steam turbine power plants.Unlike other CHP technologiesdiscussed in this chapter, a steamturbine does not directly convert afuel source to electric energy butrequires a source of high-pressuresteam delivered by either a boileror a heat recovery steam generator(HRSG).

Steam turbines used in CHPsystem are usually in the form ofeither an extraction-condensingtype system or as a back-pressuresystem. Extraction-condensingturbines have higher electrical effi-ciencies than back-pressure sys-tems but are more complex innature. The heat extracted from thesteam in extraction-condensingsystems is optimized by exhaust-ing the steam from the turbine atless than atmospheric pressures.Back-pressure turbines (non-con-densing) exhaust steam at or aboveatmospheric pressure and use hotwater as the primary heat distribu-tion medium to give a good bal-ance between power and heatoutput. The complexity of individ-ual CHP projects will dictate thetype of steam turbine to employ toensure optimal performance.

Steam turbines can vary in electric generating efficiency butusually falls in the range of 20% -40%, with a boiler/ steam turbineinstallation cost ranging from$800-$1000/kW. The incrementalcost of adding a steam turbine toan existing boiler system or to acombined cycle plant is approxi-mately $400-$800/kW.

2.3 CombustionTurbines

Combustion turbines (also re-ferred to as gas turbines) are usedthroughout the world as an effec-tive way to simultaneously pro-duce useful power and heat from a single fuel source. Combustionturbines, ranging in size from 500kilowatts to hundreds of mega-watts, produce electricity throughtheir generators while providinguseful heat captured from the tur-bine exhaust flow. The Departmentof Energy (DOE) and their indus-try partners (under the AdvancedTurbines and Engine Program{ATEP}) are developing high-efficiency, low-emission natural-gas-fired turbines to provide anenvironmentally superior technolo-gy solution for CHP applications.

Gas turbines operate in differentcycle configurations. Simple-cyclegas turbines (figure 2–3) are theconcept of a single shaft machine(with compressor and turbine on thesame shaft) that includes an aircompressor, a burner, and a powerturbine driving an electric generator.Simple-cycle gas turbines are gen-erally used in small generationcapacities less than 25 megawatts.

4

AIR INTAKE

BURNER

ELECTRICGENERATOR

FUEL

COMPRESSOR

TURBINE

HEAT RECOVERYSTEAM GENERATOR

STEAMTO LOAD

ELECTRICPOWER

Figure 2–3. Simple-Cycle Gas Turbine

A recuperated gas turbine,shown in figure 2–4, is the sameas a simple-cycle turbine, exceptfor the addition of a recuperatingheat exchanger that captures ex-haust energy to preheat the com-pressed air before it enters theburner. Recuperative gas turbinesare also primarily used in smallgeneration applications less than25 megawatts.

Buildings that have stable andpredictable electrical and thermalloads can use turbine exhaust flowto fuel a heat recovery steam gen-erator (HRSG), which providessteam for heating, cooling, andother thermal applications. Suchbuildings can maximize efficiencyby using both the electrical andthermal capacity of the turbine.

The demand for electric andthermal energy, however, variesdepending on the time of day,month, or year. As illustrated infigure 2–5, the thermal load ofBuilding A decreases in the sum-mer with the absence of spaceheating while its electric load in-creases due to summer coolingneeds. This kind of variable load isnot unusual and may result in theturbines’ available electric and orthermal outputs to go underutilized.

Building A might be forced to runits combustion turbine at partialload and buy electricity from alocal utility—or run its turbine atfull load and bypass (that is, waste)a large amount of heat from itsphysical plant. Since both of thoseoptions are undesirable, one possi-ble solution may be a CHP systemthat can vary the flow of the steamand vary the electrical output.

Load fluctuations exhibited byBuilding A may be resolved by acombined cycle system. A com-bined cycle consists of a combus-tion turbine with an HRSG in

series with an electric generatingsteam turbine (Figure 2–6). Thewaste heat from the combustionturbine produces steam at theHRSG that fuels the steam turbineto produce electricity. Combinedcycle systems have improvedgreatly over the years, and todayadvanced systems (such as theSteam Turbine Assisted Cogenera-tion {STAC} System developed bySolar Turbines) are specificallydesigned to optimize the variancebetween electrical and thermal loadrequirements. During periods ofhigher electrical demand, all or amajority of the steam output fromthe HRSG can be sent through thesteam turbine to create additionalelectrical output. In contrast, dur-ing periods of higher thermal de-mand, all or part of the steam fromthe HRSG can be used for processneeds at the facility.

Low maintenance, high qualitywaste heat, and electric efficienciesvarying between 25% - 40% makecombustion turbines an excellentchoice for CHP applications largerthen 5 megawatts. Capital costs

5

AIR INTAKE

EXHAUST

RECUPERATOR

BURNER

ELECTRICGENERATOR

TURBINE

HEAT RECOVERYSTEAM GENERATOR

STEAMTO LOAD

ELECTRICPOWER

COMPRESSOR

Figure 2–4. Recuperated Gas Turbine

THERMAL ELECTRICAL

Decem

ber

Novem

ber

October

Septe

mber

AugustJu

lyJu

neMay

April

March

Febru

ary

Januar

y

MONTHS

LOA

D

Figure 2–5. Load Profile of Building A

for gas turbines vary between$300-$900/kW.

2.4 Fuel CellsFuel cells are an exciting tech-

nology that convert hydrogen-richfuels, such as natural gas, intoelectricity and heat through anextremely quiet and environmen-tally clean process. Fuel cells generate electricity through anelectrochemical process in whichthe energy stored in the fuel isconverted directly to electricity(catalytic reaction). There arethree main components that gov-ern the operation of a fuel cell.

1. Hydrogen Reformer, fuelprocessor that extracts hy-drogen from a fuel source(such as natural gas, bio-mass, or propane)

2. Fuel Cell Stacks,electrolyte materials situ-ated between oppositelycharged electrodes, wherethe hydrogen fuel generatesDC power in an electro-chemical reaction

3. Inverter, converts DC out-puts to AC power

Figure 2–7 provides a visualexample of the energy flows.

The operating conditions of afuel cell are determined by theelectrolyte; therefore, fuel cellsare identified by the electrolyteemployed in the process. Severalfuel cell technologies are operat-ing and under development today:

• Phosphoric acidfuel cells(PAFCs) are most commonbecause they were the first fuel

cell types to become commer-cially available. They have anacid electrolyte and operate atrelatively low-temperatures,about 400°F. ONSI, the onlycommercial manufacturer offuel cells using this technology,produces units sized at 200 kWwith 700,000 Btuh of thermalheat recoverable in the form ofhot water.

• Molten carbonatefuel cells(MCFCs) are relatively high-temperature units, operating inexcess of 1100°F. MCFCs aredesigned for large-scale appli-cations on the order of 50 to100 MW. The high-temperatureexhaust gases can be used in acombined cycle system, creat-ing an overall efficiency ofabout 80 percent.

• Solid oxidefuel cells (SOFCs)also operate at high-tempera-tures, 1100 to 1800°F. At these

6

WATER

CO2

HEAT

CATHODE

DC POWER

ELECTROLYTEANODE

AIR

FUEL

Figure 2–7. Fuel Cell Schematic

Source: DOD

AIRINTAKE

BURNER

ELECTRICGENERATOR

ELECTRICGENERATOR

FUEL

COMPRESSOR

TURBINE

HEAT RECOVERYSTEAM GENERATOR

STEAMTURBINE

CONDENSER

ELECTRICPOWER

ELECTRICPOWER

Figure 2–6. Combined Cycle System

temperatures, a natural gas-powered fuel cell does notrequire a reformer. A varietyof 20 to 25 kW SOFC unitshave been tested, and units upto 150 kW are planned.

• Proton exchange membranefuel cells (PEMs) operate at low temperatures, about175°F. Manufacturers are tar-geting units in the range of 7 kW to 250 kW. Their verylow thermal and noise signa-tures might make them espe-cially useful for replacingmilitary generator sets.

Efficient and Clean

Pollution from fuel cells is solow that several Air Quality Man-agement Districts in the UnitedStates have exempted fuel cellsfrom requiring a permit to operate.Today’s natural gas-fired fuel cells operate with an electrical conver-sion efficiency of 35 to 40 percentand are predicted to climb to the50 to 60 percent range in the nearfuture. When recovered heat fromthe fuel cell process is used to ca-pacity by a facility, efficiencies canexceed 85 percent. And as withmicroturbines, multiple fuel cellscan be synchronized to meetchanging demand needs.

DOD FUEL CELLDemonstration Project

The Department of Defense(DOD) and The U.S. Army Con-struction Engineering ResearchLaboratory (USACERL) have en-gaged in a demonstration programto stimulate growth and economiesof scale in the fuel cell industry andto determine the role of fuel cells inDOD’s long-term energy strategy.

In this demonstration pro-gram, a total of 30 PAFCs,manufactured by the ONSICorporation, were installedand are being operated atDOD sites across the Unit-ed States.

This demonstrationproject has been used in arange of thermal applica-tions shown in figure 2–8.

The DOD fuel cells areused in a variety of diversemilitary building applica-tions. The DOD demon-stration program yieldedsignificant results that canbe viewed in entirety atwww.dodfuelcell.com.Table 2–3 provides a snap-shot of results at three DODdemonstration facilities.

As of October 1998, the DODFuel Cell Fleet Summary showedthe following:

• Total Run Time 328,725 hours

• Unadjusted Availability 71%

• Energy $ Saved (estimated) $2,331,958

• NOx Abated 113 Tons

• SOx Abated 249 Tons

• CO2 Abated 13,924 Tons

The DOD Fuel Cell Demonstra-tion Program obtained a great dealof information about the selectionand installation of fuel cells foronsite cogeneration. Using thisinformation, USACERL createdan application guide to provide aframework for other Federal facil-ities evaluating the potential forfuel cell cogeneration. This inter-active guide can be found on theDOD Fuel Cell DemonstrationWeb site previously listed.

The major barrier to fuel cellmarket acceptance is their highfirst cost: $3,000 to $3,500 per

7

CONTROL CENTER3%

KITCHEN3%

LAUNDRY3%

OFFICEBUILDINGS

10%

GYMNASIUM/POOL10%

DORMS/BARRACKS

10%

HOSPITALS23%

CENTRALPLANTS

38%

Figure 2–8. DOD Thermal Applications

Table 2–3. DOD Facility ResultsSite Building Thermal Estimated

Name Application Application Savings

Edwards Air Hospital DHW/ $96,000Force Base Space Heat

Fort Richardson Armory Space Heat/ $67,000(Army) Building DHW

United States Academy Kitchen $38,000Naval Academy Dormitory DHW

kilowatt installed. Experts predictthat fuel cell costs will have tocome down below $1,000 per kilo-watt before any significant non-government subsidized markettransformation takes place. Grow-ing public interest and increasedmanufacturer competition will playa major role in driving down theprice over the next few years.

2.5 Micro-TurbinesMicro-turbine generators are

small, single-staged combustionturbines with outputs ranging insize from 30 to 100 kilowatts. Micro-turbines used in CHP applications can vary in cost bet-ween $500 to $1500 per kilowattinstalled. They are reasonably effi-cient (30 percent), have low main-tenance costs, offer fuel flexibility,allow recovery of thermal heat, andhave low emissions. When morepower is required, multiple unitscan be synchronized to meet thechanging demand.

Honeywell Power Systems hasdeveloped a micro-turbine labeledthe Parallon 75 TurboGeneratorPower System. The Parallon 75,with its 75 kilowatt rating, can actas a sole source of power—paral-lel to the grid, but not actuallyconnected to it—or as a secondsource of power—connected tothe grid to provide lower costelectricity and reliable backup.Parallel poweris a self-containedsystem that monitors the gridaround the clock; whenever thesystem can generate electricity for

less than the utility company, itkicks on automatically, supplyingonsite micro-turbine power in lieuof costly utility power.

The Capstone Micro-Turbine™was the first technology of its kindto be commercially available tothe power industry and energycustomers. The Capstone 30 kWMicroTurbine (Figure 2–9) is aUL listed, low-emissions powergeneration system with unusuallylow maintenance needs. A gasturbine-driven high-speed genera-tor is coupled with power elec-tronics that allow the system tooperate similar to the Parallon 75,either connected to the grid or instand-alone modes. Both manufac-turers offer quality onsite CHPsolutions.

2.6 Hybrid Fuel Cell/Micro-Turbine Systems

Edison Technology Solutions,in cooperation with DOE, the Cali-fornia Energy Commission, andSiemens Westinghouse, have de-veloped the world’s first “hybrid”generating plant, integrating a fuelcell with a micro-turbine generator.This hybrid power plant has a low-er capital cost than a stand-alonefuel cell with approximately twicethe efficiency of a micro-turbine.The technology is expected to op-erate at an electric efficiency of 60 percent with an average cost of$1,000 per kilowatt.

This hybrid technology uses themicro-turbine’s compressor to

deliver high-pressure air to thefuel cell where it reacts with natu-ral gas to produce electricity andheat through an electrochemicalprocess. Exhaust gas from the fuelcell then feeds the micro-turbineto produce even more electricity.Edison Technology Solutionschose the National Fuel Cell Re-search Center at UC Irvine inIrvine, California, to test this newand exciting technology. The testproject is currently integrating a60 kilowatt micro-turbine with a200 kilowatt solid oxide fuel cell.

Technology SummaryChapter 2 examined different

cogeneration technologies, someemerging and some established.Table 2–4 offers a comparison ofthe technical and economical pa-rameters distinguishing CHP tech-nologies.

8

Reprinted with Permission:Capstone Turbine Corp

Figure 2–9. Capstone 30kWMicroTurbine

3.0 FederalSector Potential

The feasibility of applyingcombined heat and power (CHP)technologies within Federal gov-ernment facilities is dependentupon identifying the best uses ofCHP and assuming an appropri-ate investment time frame. Un-dertaking a CHP project shouldbe viewed as a long-term invest-ment, in terms of planning, im-plementation, and operation. Theproper planning of all key aspectsof a medium- to large-scale suc-cessful CHP project—includinglegal, financial, regulatory, envi-ronmental, engineering, andtraining issues—requires that theproject schedule match the ex-pected benefits from full CHPimplementation.

The financial benefits from aCHP project will depend upon theamount of the purchased thermaland electric power that the CHPsystem is replacing. Larger Feder-al building sites, including mili-tary bases, multi-building medicalcenters, national laboratory com-plexes, and training/research cen-ters, have the largest purchasedfuel and electric power require-ments. Therefore, these largerFederal facilities will reap thegreatest financial benefit fromapplying existing CHP technology.

Federal energy-using facilitiesfall into one of three time hori-zons in which installation of aCHP system will achieve itsgreatest potential:

A. Short-term (0 to 3years)• Off-shore military bases (for

reasons of security, powerquality, and power stability)

• Federal correctional facilitiesin heating dominated climates(because these buildings havea need for the thermal outputfrom a CHP system for bothspace heating and domestichot water heating)

• Department of Veterans Affairsand DOD medical centers (be-cause these multi-buildingcenters have a fairly constantneed for the thermal outputfrom a CHP system for suchthings as heating domestic hotwater, heating service waterfor reheat coils, and sterilizingmedical equipment)

9

Table 2–4. Technical and Economical Parameters Distinguishing CHP TechnologiesParameter Natural Steam Gas Fuel Micro- “Hybrid”

(approximations) Gas Engine Turbine Turbine Cell Turbine

Capacity 25 kW- Any 500 kW- 200 kW-2 MW 25 kW- 250 kW5 MW 25 MW (testing down to 1kW) 100 kW

Electric 25-45% 30-42% 25-40%(simple) 35-55% 25-30% 60%Efficiency 40-60% (combined)

Footprint (sqft/kW) 0.22-0.31 <0.1 0.02-0.61 0.6-4.0 0.15-1.5 –

CHP installed 800-1500 800-1000 700-900 >3,000 700-1300 1000-1500Cost $/kW (typical)

O&M Cost 0.007-0.015 0.004 0.002-0.008 0.003-0.015 0.002-0.01 –($/kWh) (typical)

Availability 92%-97% Near 100% 90%-98% >95% 90%-98% –

NOx Emissions 2.2-28 1.8 0.4-4.0 <0.02 0.4-2.2 –(lbs/MWh)

Uses for Heat Hot water, LP-HP steam, Heat, hot water, Hot water, Heat, –Recovery LP steam, district heating LP-HP steam, LP-HP steam hot water,

district heating district heating LP steam

CHP Output 3,400 N/A 3,400-12,000 500-3,700 4,000-15,000 –(Btu/kWh)

Usable Temp 180-900 N/A 500-1,100 140-700 400-650 –For CHP (F)

Source: ONSITE SYCOM Energy Corporation, 1999 (except for Hybrid data)

4.0 ApplicationsChapter 4 discusses seven sig-

nificant parameters when consid-ering combined heat and power(CHP) implementation in Federalfacilities. These parameters includescreening methodology, economicanalysis, utility interconnections,environmental compliance, pre-liminary dos and don’ts, operatingconcerns, and maintenance issues.

Screening MethodologyChapter 3 describes optimal

conditions for implementing CHPtechnologies in Federal facilities.If your facility does not meet theconditions, implementing CHPtechnologies might not be ideal.Conversely, meeting those condi-tions indicates a strong technical

case for further (economical) con-sideration of CHP technologies.Generally, plants having a verylow percentage of electrical tototal energy conversion are notconsidered economical for conver-sion to CHP. However, if theseelectricity generation costs perkilowatt-hour (for capital plusproduction) are less than the costof electricity purchased from thelocal utility, then your facility hasmet the first screening test.

Because the main incentive ofCHP is to generate electricity at alower cost than it can bepurchased from the utility, theeconomics of CHP are sharplyinfluenced by the marginal cost ofgenerating electricity. There aretwo kinds of primary plant costs:capital costs and production costs.

Capital costs(in $/kWh) deter-mine whether a given plant issound enough to obtain financing,and thus able to pay the fixedcharges against these costs. Pro-duction costsare the true measureof the cost of power generated.Production costs are composed ofthe following:

a.) Fixed charges.

b.) Fuel costs.

c.) Operation and maintenancecosts.

It is important to calculate theproduction costs of electricity asan excess over the generatingcosts of thermal energy alone, andto compare these production costswith the cost of electricity pur-chased from a utility.

• Federal office building com-plexes (such as multiple-build-ing Federal facilities that coulduse the thermal output from acentralized CHP system as theinput to absorption coolingequipment to achieve higheroverall efficiency)

• Government Owned/Contrac-tor Operated (GOCO) manu-facturing and research facilities(because many manufacturingand research processes requiresteam or other thermal powerfor the production of industrialor research products)

B. Mid-term (more than3, but less than 5 years) • Larger (500,000 sf and larger)

stand-alone Federal buildingslocated in areas not served bydistrict steam or district chilled

water systems. These largerFederal office buildings canuse the thermal output from aCHP system to provide theneeded heat-source for absorp-tion cooling equipment. Forexample, the 2.3 million squarefoot immigration facility locat-ed next to the Canadian borderin Ambrose, North Dakota

• Military base-wide steamheating systems that havelarge central plant boilers during the summer or otheroff-peak periods

C. Long-term (5 ormore years) • Medium-sized Federal build-

ings that can use the thermaloutput as the source for oper-ating absorption coolingequipment in summer.

• Military base light industrialfacilities (such as welding,vehicle engine repair shops,machine shops) that needpeak power use and can usethe thermal output for processsteam.

Five years from now, CHP tech-nologies will likely be less expen-sive to install and will have greateroutput per unit of input fuel. In-creases in the cost of fuel oils andnatural gas can result from inter-national events beyond the control of fuel suppliers, but this will re-sult in a lower life cycle cost forall CHP technologies. Thus, as therange of applications for CHPgrows—installing separate fuelcells in individual military basehousing units, for example—theeconomics of CHP will becomemore attractive.

10

11

Economic Analysis (Life-Cycle Costing)

Federal agencies are required to evaluate energy-related invest-ments on the basis of minimumlife-cycle costs (10 CFR Part 436).(Source: FEMP). Life-cycle cost-ing is an effective method for cal-culating the economic feasibilityof CHP projects. Life-cycle costsaccount for the collective total ofimplementation, operating, andmaintenance costs over the life ofan upgrade. Appendix B outlinesthe Federal life-cycle costing procedures and information on the Building Life-Cycle Costing(BLCC) software developed by theNational Institute of Standards andTechnology (NIST).

Utility InterconnectionsRequirements for interconnec-

tion with public utilities’ gridsvary from cogenerator to cogener-ator and from one electric utilityto another, depending upon gener-ation equipment, size, and hostutility systems. Interconnectionequipment requirements increasewith generator size and voltagelevel. Generally, complexity of theutility interface depends on themode of transition between paral-leling and stand-alone operation.

The plant connection to the elec-tric grid must have an automaticutility tie-breaker and associatedprotective relays. When utilitypower is lost, this tie-breaker opensand isolates the generator and itsloads from the utility. The protec-tive relays at the entrance and at thegenerator must be coordinated sothat the utility tie-breaker opensbefore the generator’s breaker. Anautomatic load control system isneeded to shed non-critical loads to

match generator’s capacity. Whenutility power returns, the generatormust be synchronized with theutility across the utility tie-breaker,whereas under normal start-upconditions the generator is syn-chronized across the generatorcircuit breaker. The synchronizingequipment must accommodateboth situations.

When a cogeneration system isintegrated into the utility system,the following issues must be met:

(a) Control and monitoring

(b) Metering

(c) Protection

(d) Stability

(e) Voltage, frequency, syn-chronization, and reactivecompensation for powerfactors

(f) Safety

(g) Power system imbalance

(h) Voltage flicker

(i) Harmonics

Utility interconnection withonsite CHP technologies is cur-rently a burdensome and lengthyprocess. This laborious processcauses a certain degree of appre-hension and disincentive for Fed-eral facilities considering CHPprojects. The Barriers and Solu-tions section of Chapter 5 des-cribes this grid connectionproblem and outlines DOE initia-tives to alleviate the situation.

EnvironmentalCompliance

Advantages of Outdoor AirCompliance

CHP technologies are frequent-ly fueled by natural gas, which isinherently clean compared with

other fossil fuels. Combining arelatively clean fuel with state-of-the-art combustion controls foundin newer technologies results in an extremely clean CHP process.And thanks to an electrochemicalprocess, fuel cell air pollution isalmost negligible.

As a result, CHP technologyhas the potential to reduce overallemissions of both criteria pollu-tants (NOx, SO2) and greenhousegases (CO2). The use of CHP sys-tems by customers to supply someor all of their electricity will dis-place the need for power purchas-es and offset central station plantand line loss emissions. CHP tech-nology also displaces emissionsfrom the existing boiler or furnaceat the site.

The Outdoor EnvironmentalBarrier Confronting CHP:

In the past, pollution from elec-tricity generation was always theutilities’ problem; now, with theemergence of onsite generation,accountability for emissions (whenin excess) shifts to the facility. TheClean Air Act requires costly andtime-consuming New Source Re-view (NSR) procedures whenemissions significantly increase ata site. Also, current air pollutionregulations in the United States arebased on limiting the amount ofemission per unit of fuel input.This approach does not credit CHPwith emission reductions associat-ed with grid reductions or fromdisplaced emissions from onsitefossil fuel combustion sources.

Possible Solutions:

CHP advocates, both privateand institutional, acknowledgethat environmental permitting is a

major obstacle to the proliferationof new onsite CHP projects. Ad-vocates of CHP are encouragingthe EPA to adopt output-basedstandards that set pollutionallowances per unit of heat andelectricity, accounting for overallemission reductions resulting fromdisplaced central station and exist-ing boiler emissions. Paul Stolp-man, Director of EPA’s Office ofAtmospheric Programs remarkedat last year’s CHP Summit inWashington, D.C.: “EPA recog-nizes CHP as a key component ofclimate policy and is committed topursuing regulatory actions tolevel the playing field for CHP.”

Preliminary Do’s andDon’ts

Do’s1. Select components that are

designed for industrial ap-plications and that includeno design life compromisesinherited from vehicle oraerospace ancestries. Primemovers, in particular, mustbe designed to achieve80,000 hours of useful life.

2. Consider prime movers thathave at least 8,000 hoursmean time between forcedoutages.

3. Take into account onlysystems that comply with

following specifications:Electrical efficiency for thegas-turbine-based systemsthat include recuperators orheat recovery units (orboth) must be greater than35% based on HHV of afuel (or greater than 38%LHV) regardless of theircogeneration efficiency.For cogeneration systemslarger than 50 kW, partload (~50%) electrical effi-ciencies should be no lessthan 30%.

4. For systems burning naturalgas as a fuel, ensure thatemissions do not exceedthe following values: NOx< 10 ppmv, CO < 25 ppmv.

5. If the plant utilizes Rankinecycle, (i.e., a steam turbine)use the topping cycle forpower generation.

6. When using a gas-turbineengine in a simple-cycleconfiguration, consider acounterflow recuperator toincrease thermal efficiency.

7. Use steam turbine in lieu ofpressure reducing stations.

Don’ts1. Do not use a bottoming

cycle.

2. Do not match the electricaloutput of the CHP generatorto the peak electrical demand.

3. Do not use expensive post-processing of the exhaust tocompensate for elevatedemissions of inadequatecombustion equipment.

4. Do not design andconstruct complex thermo-dynamic or exotic hybridcycles—the technology isnot perfected yet.

Operating Concerns

Natural Gas Engines andTurbines

Years of reliance on grid-con-nected central station electricityhave created apprehension aboutthe reliability of new onsite CHPtechnologies. Fortunately, exten-sive research (see table 4–1) hasshown that gas engines and gasturbines are just as reliable as cen-tral station utility plants, if notmore so.

Natural gas power generationsystems exceed the reliability ofmost central station power genera-tion units, according to a studyconducted by ARINC Corporationfor the Gas Research Institute(GRI). The study consisted of 122natural-gas-powered generatingunits with nearly 2 million hoursof operating time. Units weregrouped into categories reflectingsize (from 60 kW to 100 MW),type of system (engine or turbine),

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Table 4–1. Reliability of Natural-Gas-Powered Cogeneration SystemsReciprocating Engines Gas Turbine Engines Electric Utility

Operational Reliability Measure Group 1 Group 2 Group 3 Group 4 Group 5 Group 6 1986-1990

Power 60 kW 80-800 kW >800 kW 1-5 MW 5-25 MW >25 MW –

Availability Factor (%) 95.8 94.5 91.2 92.7 90.0 93.3 85.9

Forced Outage Rate (%) 5.9 4.7 6.1 4.8 6.5 2.1 24.7

Scheduled Outage Factor (%) 0.2 2.0 3.5 3.0 4.8 4.8 9.9

use of emission controls, and typeof thermal application; all of theseunits included cogeneration heatrecovery. Table 4–1 displays theresults of this analysis, comparingcogeneration and central stationreliability.

Table 4–1 demonstrates the impressive reliability of CHPtechnologies—natural gas enginesand turbines—when comparedwith traditional central stationutility generation.

Fuel Cells

Fuel cell technology has beenaround for a long time, but its useas a stationary electric generatingsource is quite recent. Most appli-cations are in the prototype ordemonstration phase, but the De-partment of Defense (DOD) andUSACERL have completed a reliability study of the fuel celldemonstration project at variousmilitary installations across theUnited States. The results of thedemonstration project are summa-rized in table 4–2 to reflect themany operating parameters in-volved in fuel cell cogeneration.Beyond energy, costs, and pollu-tion, the demonstration projectanalyzed the reliability of fuelcells. Note that Table 4–2 displaysonly the average findings for the30 Phosphoric Acid (PAFC) ONSIfuel cells.

Table 4–2. DOD Fuel Cell Demonstration Project—

Reliability Results

Availability 71.0%

Forced Outage Rate 7.7%

Cell Voltage Degradation 8.0%

Hybrid Micro-Turbine/FuelCell

As stated earlier in this report,the hybrid micro-turbine/fuel cellis so new that it is only now beinginstalled at the National Fuel CellResearch Center for testing andevaluation. Until further studies areconducted, it would not be prudentto make reliability predictions.

Maintenance Issues

Natural Gas Engines

Natural gas-engine-packagedcogenerators (as described in sec-tion 2.1) are being developed foronsite CHP applications withease of maintenance in mind. Arecent study indicates that opera-tions and maintenance (O&M)costs for gas engines are in therange of $0.0075-$0.01/kWh.

Steam Turbines

Proper maintenance is impor-tant because the power output ofsteam turbines (as described insection 2–2) can degrade if con-taminants from the boiler carryover and deposit on turbine noz-zles. Maintenance is also crucialto auxiliary components, such aslubricating-oil pumps, coolers and oil strainers. Steam turbine(O&M) costs are typically lessthan $0.004 per kWh.

Gas Turbines

Gas turbines being developedout of DOE’s Advanced TurbineSystems program (as described insection 2.3) are designed withmodular assembly and mainte-nance components. The majorsubsystems—including the burner,

turbine, compressor, recuperator,gearbox, and generator—can bechanged independently in the fieldwithout replacing the entire gasturbine. O&M costs vary amongdealers, but can be expected in the$0.002-$0.008/kWh range.

Fuel Cells

To properly maintain fuel cells(as described in section 2.4), it is important to set up a scheduleof routine maintenance cycles.Fuel cell O&M costs to the enduser are usually in the $0.003 to$0.015/kWh range. This ensuresreliability and peak performanceover the life of the product. Main-tenance usually covers compo-nents such as the fuel cell stack,air filters, water treatment beds,pressure vessels, motors, valveactuators, and pressure pipingsystems.

Micro-Turbines

Micro-turbines (as described in section 2.5) are a relatively new CHP technology slowly en-tering the market as a viable option for small-scale CHP gener-ation. Micro-turbines are designedto be as maintenance-free as pos-sible. They are developed withquiet air-bearings that need no oil, water, or other maintenance.Of course, routine maintenance of air/fuel filters, ignitors, ther-mocouples, and fuel injectors,is important for warranties thatguarantee specific efficiencies and equipment life spans. Mainte-nance is highly recommended bythe manufacturer to ensure peakperformance. O&M costs are esti-mated at $0.002-$0.01/kWh.

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5.0 TechnologyPerformance

Field ExperienceAs discussed in Chapters 2 and

4, field experience reveals that on-site CHP gas engines and gasturbines not only operate with low-er energy costs and cleaner emis-sions, but are just as reliable ascentral station utility plants, if notmore so. The real question aboutCHP technology today is how willall CHP technologies perform as astationary electric power source atFederal facilities?

One path to answer that ques-tion can be found in the Depart-ment of Defense (DOD) Fuel CellDemonstration project. The projectincluded the installation and moni-tored operation of 30 ONSI PAFCsunder the direction of CERL. As ofSeptember 1999, these fuel cellshave generated 82,504 megawatt-hours of electricity, 157,808 mega-Btus of thermal energy, and saved$3,368,307 in displaced electricaland thermal energy costs. Highinitial costs are the main barrier to non-subsidized fuel cell imple-mentation in the Federal sector;however, the DOD Demonstrationproject revealed that the technolo-gy clearly works and that withfurther government research anddevelopment with industry partner-ships, economical installed costsare within reach.

While CHP technologies otherthan fuel cells have been installed,there is no similar compilation of

statistics of these non-fuel cellapplications showing energy savedand costs displaced.

Equipment ChangesBecause of market-driven

competition and DOE researchsupport, CHP equipment has un-dergone more improvements andsubsequent changes than othertypes of traditional thermal andpower generation equipment. Key to improvements in CHPtechnology is that major manu-facturers have quickly acceptedDOE-sponsored research andhave incorporated the resultsinto their products.

As an example of this partner-ship, DOE’s Office of IndustrialTechnologies has an IndustrialPower Generation program to pro-

duce 21st century gas turbines andsystems. Partners in this study in-clude gas turbine manufacturers,universities, natural gas compa-nies, electric power producers,National Laboratories, and endusers. Solar Turbines, a major tur-bine manufacturer of CHP sys-tems, was selected by DOE to testthe use of advanced ceramics (noz-zles and blades with enhancedstrength and durability) to increasethe performance of its gas turbines.The benefit to the CHP industry ofthese innovative ceramic compo-nents is the increase in turbineinlet temperature and reduction incooling air requirements. An envi-ronmental benefit is that the “hotwall” ceramic lines also enabled areduction in gas turbine emissionsof NOx and carbon monoxide.

Barriers and Solutions CHP systems are efficient. They

reduce total utility expenses, de-crease central power plant air pol-lution, and are reliable. So whyisn’t this technology catching on?Unfortunately, many institutionaland regulatory barriers—inter-connection with the grid, pricingpractices, utility tariffs, and envi-ronmental permitting, to name afew hinder implementation.

Barrier

The Clean Air Act requirescostly and time-consuming NewSource Review (NSR) procedures.As well, compliance requirementsdo not credit CHP projects withemission reductions associatedwith grid reductions or from dis-placed emissions from on-sitefossil fuel combustion sources.

Solution

DOE is currently working withEPA and individual states to assistefficient onsite CHP technologieswithin the framework of the CleanAir Act. This approach is to in-crease the use of performance andoutput-based environmental stan-dards and streamline the permit-ting processes for onsite CHPgeneration.

Barrier

Implementation of CHP is notthe primary mission for any feder-al agency. Most agencies are re-quired to address the programsfunded by Congress, and exclud-ing DOE, this does not includeCHP. Therefore, this is little in-centive to “try something new”as CHP is often perceived.

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Solution

DOE needs to take the leader-ship position and demonstrate the energy expense savings suc-cess that CHP can achieve. Asmore agencies realize that OMBwill issue a “scorecard” for theirenergy performance, CHP shouldbe positioned as a ready means toimprove their score.

Barrier

Interconnectivity

Utility requirements for inter-connecting non-utility–owned on-site CHP generation with theutility’s electric distribution gridcan severely delay a new CHPproject, increase its cost, or eventerminate the project altogether.Utility interconnection require-ments can be burdensome, particu-larly for smaller CHP projects. Autility’s requirements describingits mandated procedures can belaborious, and each utility typical-ly has a different set of require-ments. Meeting those requirementscan cost thousands of dollars.

Back Up Charges

On occasion, CHP technologieswill require down time for mainte-nance. During this time the facilitywill have to purchase its electricity(under a “back up” rate schedule)from its local utility. These “back-up” charges are in many casesexcessive and make onsite genera-tion economically unfeasible.

Solution

Excerpts from Dan Reichers(Assistant Secretary for EnergyEfficiency and Renewable Energy)Testimony to the United StatesSenate – June 1999

What is needed is a non-discriminatory national standardthat applies to all distributed powertechnologies that also assures thatthese systems are properly inte-grated into the grid in a mannerthat addresses critical safety, relia-bility, and power quality issues.DOE has begun several activitiesto address interconnection and isworking with the Institute of Elec-trical and Electronics Engineers(IEEE) to develop a uniform na-tional interconnection standard.DOE’s support will enable what istypically a 5- to 8-year process tobe accomplished in about 2 years.An important piece of DOE policystrategy is to knock down onsitegeneration barriers, which is in-cluded in the Administration’sComprehensive Electricity Com-petition Act submitted to Congresson April 15, 1999. The bill alsoincludes a number of tax provi-sions that are needed to updateInternal Revenue Code to providefair treatment to onsite power. Thebill would set tax depreciationschedule lifetimes for onsite pow-er equipment at 15 years, not 39 years. Addressing this currentambiguity in the Internal RevenueCode is critical to the economicfuture of onsite generation tech-nologies that potentially are disadvantaged by inequitable de-preciation schedules. In addition,

the bill also includes an 8-percenttax credit for certain combinedheat and power systems due to thesubstantial economic and environ-mental benefits these systems canprovide.

Also, the Gas Research Institute(GRI) recently started a programcalled Switch-gear and Intercon-nection Systems (ISIS), designedto accomplish the following:

• Create a reduction in capitalcosts (25–50%).

• Advance the concept of “Plugand Play” (50% reduction ininstallation time and labor).

• Integrate with leading naturalgas engine and turbine genera-tor set manufacturers.

• Conform to basic electric utility interconnection require-ments and incorporateadvanced interconnect/generator set protective functions.

• Conform to existing or pro-jected industry standards.

• Advanced remote monitoring,communications, and controlfunctions.

ConclusionBarriers to CHP implementa-

tion are real and, in some cases,daunting. Fortunately, DOE andother Federal agencies are ack-nowledging these barriers andexpending resources to streamlinethe laborious processes and proce-dures of grid connection and envi-ronmental permitting.

6.0 CombinedHeat and PowerCase Studies

This chapter presents case stud-ies of CHP technologies. Due tothe changes in the operational re-quirements mandated by increasedsecurity regulations on differentDepartment of Defense locations,and the increase in privatization ofdistribution systems, there is limit-ed information available aboutDOD CHP installations. ManyDOD facilities that either have orhad CHP installations were con-tacted, but most did not providecomplete system characteristics.Nevertheless, these DOD sites arelisted in Appendix A for informa-tional purposes only.

Traditional CHP

The Marine Corps RecruitDepot at Parris Island, SouthCarolina

South Carolina Electric & GasCompany (SCE&G) currently sup-plies base load electricity servicesto the Marine Corps Recruit Depot(MCRD) at Parris Island, SouthCarolina (PISC). Historically, anonsite Central Power Plant (CPP)was used to supply all the electricpower needs for the Depot. Today,however, the three 1,000-Kilowatt(KW) extraction steam turbo-generators that make up the CPPare providing peak shaving, powerfactor correction, and combinedheat and power (CHP) for the12.47 KV system. Distributionfrom the power plant is via 4.16 KV underground system, which

serves 43 mission-essential build-ings in the core area.

During the last couple of years,MCRD has worked with the De-partment of Energy (DOE) andPacific Northwest National Labo-ratories (PNNL) in the study,design and installation of the De-cision System for Operations andMaintenance (DSOM) Project.The DSOM system is an innova-tive approach to the operation and maintenance at the CPP atMCRD. DSOM is an integratedhardware/software platform forimproving energy efficiency, andreducing operating and mainte-nance costs. The system also reviews purchased electricity costs and fuel costs to ensure thatthe Depot is operating the turbinegenerators in the most economicalmanner (i.e. to generate electricalpower versus purchasing from thelocal power company). The pro-jected economics savings forCHP/peak shavings for this proj-ect are $100K per year.

The Naval Medical Center,San Diego, California

The Naval Medical Center, SanDiego (NMCSD) delivers qualityhealth services in support of theUS Armed Forces and maintainsmedical readiness while advancingmilitary medicine through educa-tion, training, and research. EnergyManagement is another strong at-tribute of the medical center. Cur-rently, three 800 kW gas turbines,operating parallel to the grid,supply high quality power to sup-plement and reduce NMCSD’sdependence on central utility pow-er. The exhaust heat from each gasturbine produces 6,100 pounds-per-hour of high-pressure steam

via a heat recovery steam generator(HRSG). The HRSG provides use-ful thermal energy for a variety ofheating and cooling needs, includ-ing an 800-ton absorption chiller,domestic hot water, sterilizationand kitchen support systems. NMCSD’s CHP plant has proven a successful and viable option foronsite support of hospital electri-cal, heating and cooling needs.

Fuel CellsFuel cells are poised to be a ma-

jor player in future cogenerationefforts. They offer the promise ofexceptionally clean onsite powergeneration. For many projects, thecost of fuel cells—about $3,000per kilowatt for the primary equip-ment, and approximately $1,000per kilowatt for installation—is no longer prohibitive, thanks inpart by efforts of the Federal gov-ernment to provide leadership inpromoting fuel cell research todetermine their potential and tolower their cost. In the past fewyears, the cost of fuel cells perkilowatt has already dropped some66 percent. Like all co-generationtechnologies, fuel cells produceboth electricity and useful thermalenergy. Capturing and using theheat produced by the chemicalreaction that produces electricity is key to making fuel cell technol-ogy economically viable.

For the DOD Fuel Cell Demon-stration program, 30 fuel cellsmanufactured by ONSI Corpora-tion of South Windsor, Connecticutwere installed on different DODsites. All of these fuel cells usephosphoric acid as an electrolyteand, and like most fuel cells, it usesnatural gas as its source of hydro-

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gen. Additional information oneach of the 30 fuel cell demonstra-tions can be found on the DODFuel Cell Demonstration web sitelocated at www.dodfuelcell.com

The U.S. Military Academy at West Point

The U.S. Military Academy inWest Point, New York, has used afuel cell to supply some of its elec-tricity and thermal energy needssince November 1995. The Acade-my, selected by the DOD Fuel CellDemonstration Project to help testthe viability and potential of fuelcells, has an annual enrollment ofmore than 4,000 cadets. ASHRAEdesign temperatures for the site are4ºF in the winter and 88ºF in thesummer. The fuel cell is located atthe central boiler plant in the park-ing area on the south side of themain building.

The fuel cell is a Model PC25Brated at 200 kilowatts. Its electri-cal interface is at the existing480-volt panels in the electricalroom of the central boiler plant.It uses natural gas as its fuelsource. The heat produced by the fuel cell is used to preheatboiler make-up water.

Length of piping/wiring runsElectrical (to panel) ~150 feet

Thermal (to mechanical room) ~90 feet

Natural Gas ~150 feet

Cooling Module ~20 feet

The energy efficiency of thisinstallation is approximately 68.2percent. Electric efficiency is31.9 percent, and thermal effi-ciency is 36.3 percent (HHV).(See figure 6–1.)

The U.S. Military Academypurchases its electricity from Orange and Rockland Utilitiesand its natural gas from CentralHudson Gas & Electric Company.The fuel cell has allowed theAcademy to achieve the followingannual savings.

Electrical Savings $79,000

Thermal Savings $26,000

TOTAL SAVINGS $105,000

Minus Natural Gas Cost ($75,000)

NET SAVINGS $30,000

Even without including installa-tion costs, the simple payback ishigh, however, there are severalefforts both public and privateaimed at bringing fuel cell pricesdown to more competitive levels.

The U.S. Naval Hospital inJacksonville, Florida

The U.S. Naval Hospital atNaval Air Station (NAS) Jackson-ville is a nine building complexthat serves base personnel as wellas other service personnel in theregion. The main building haseight stories and originally con-tained 400 beds. Most of the areahas been converted to supportoutpatients. The hospital current-ly handles around 40 to 50overnight patients. The otherbuildings in the complex includea new 90,000-sf outpatient facili-ty, laboratories, office buildings,and training facilities. TheASHRAE design temperatures forthe site are 32ºF in the winter and

200 kWFUEL CELL

CITYWATER

WATER SOFTENERS

DEAERATOR TOBOILER

#1 #2

Figure 6–1. Thermal Use Schematic, U.S. Military Academy

Source: DOD

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94ºF in the summer. A fuel cellwas installed in 1997 in a chillerroom adjacent to the main me-chanical room.

The fuel cell is a Model PC25Crated at 200 kilowatts. Its electri-cal interface is an electrical panellocated in the chiller room. It isfueled by natural gas. Thermalenergy from the fuel cell is direct-ed toward a refurbished 1,500-gallon thermal tank that feeds twoinstantaneous water heaters.

Length of piping/wiring runsElectrical (to panel) ~60 feet

Thermal (to storage tank) ~65 feet

Natural Gas ~30 feet

Cooling Module ~20 feet

The hospital complex purchas-es electricity from the NAS Pub-lic Works Center at a flat rate of6.8 cents per kilowatt-hour. Thefuel cell has allowed the hospitalto achieve the following annualsavings:

Electric Savings $107,000

Thermal Savings $45,000

TOTAL SAVINGS $152,000

Minus Natural Gas Cost ($62,000)

NET SAVINGS $90,000

The U.S. Naval Academy at Annapolis

The U.S. Naval Academy in An-napolis, Maryland, established in1845, is an undergraduate collegethat prepares young men andwomen to become officers in the

FUELCELL

HEATEXCHANGER

STEAMHEAT

EXCHANGER

CITYWATER

CITYWATER

CITYWATER

Figure 6–2. Thermal Use Schematic, U.S. Naval Hospital, Jacksonville

STORAGETANK

STEAMHEATER

STEAMHEATER

STEAMHEATER

TOHOSPITALROOMS

RECIRCLOOPFROMHOSPITAL

TOKITCHEN

RECIRCLOOPFROMKITCHEN

Source: DOD

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7.0. Outlook forCHP Technology:Strategies forSuccess

For some 50 years, centralizedpower generation has been usedalmost exclusively. Small-scaleCHP technology depended on theuse of reciprocating engines. Mostelectrical generators were foremergency purposes and not con-nected to the public utility grid.Now, with the advent of fuel cellsand hybrid technologies, there isan increasing demand for smallerscale distributed generation equip-ment. The restructuring of theelectric utility industry has createdthe need for Federal energy con-sumers to realize that there arenow and will be more choices for

energy supply. The need for reli-able electric power on-site, andthe increasing strains on an agingelectric power grid both mean thatthe trend is toward CHP. Usedwisely, CHP can be the key tech-nology to improve power quality,boost system reliability, reduceenergy costs, and help delay utilitycapital investments.

Traditional CHP markets arethose with high heat demand, suchas industrial sites with processheating requirements (especiallythe petroleum, chemical, brewing,and paper industries), hospitals,leisure centers, sewage treatmentplants, and district heating/coolingplants. Today, new engine andturbine technologies have a signif-icant potential for small-scaleCHP in multi-residential and com-mercial applications.

Improvements in combustionturbine performance, decline in equipment and constructionprices, and apparent ease of proj-ect permitting, have resulted ingas-fired combined-cycle combus-tion turbines and simple-cyclemicro turbines emerging as theleast-cost alternative for bulk power generation.

CHP economics are sensitive tosite- and plant configuration andare governed by the site’s energydemand profile as well as theplant’s capital and maintenancecosts, rating hours, and energyprices. Many times, inadequateattention to even one of these fac-tors has led to failure of the plantto fulfill its promise. Thus, despitestrong Federal support of the prin-ciple of CHP, this sensible energygeneration technology has notbeen fully embraced by the Federalor private sectors.

U.S. Navy and the U.S. MarineCorps. It is also an energy show-case site for the U.S. Navy, whereadvanced energy technologies aredemonstrated. The fuel cell, whichwas installed at the Academy in1997, is housed in the galley atwhich more than 12,000 meals areserved each day.

The fuel cell is a Model PC25Crated at 200 kilowatts. Its electri-cal output is a fuse box inside anearby electrical room. Like mostfuel cells, it is fueled by naturalgas. Thermal energy from the fuelcell is used to preheat the coldwater make-up for domestic hotwater purposes.

Length of piping wiring runsElectrical (to panel) ~70 feet

Thermal (to make-up line) ~400 feet

Natural Gas ~100 feet

Cooling Module ~20 feet

Thermal utilization is estimatedat 78 percent.

Savings on energy bills achievedby using the fuel cell are approxi-mately $40,000 annually.

Electric Savings $75,000

Thermal Savings $21,000

TOTAL SAVINGS $96,000

Minus Natural Gas as fuel ($56,000)

NET SAVINGS $40,000

200 kWFUEL CELL

CITY WATER

TO GALLEYBOILER ROOM

Figure 6–3. Thermal Use Schematic, U.S. Naval Academy

Source: DOD

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On the other hand, a properlyimplemented CHP plant rewardsits owner with strong reliabilityand profitability. Successful CHPinstallations are based on the real-ization of the following basic re-quirements:

1) The system is sized to notexceed the thermal needs ofthe process.

2) Natural gas is used as thepreferred fuel for commer-cial CHP.

3) To enable efficient powergeneration, thermal energyis generated at substantiallyhigher pressure and temper-ature than that which need-ed for its final use. Forexample, the outlet temper-ature and pressure of steamfrom a heat recovery steamgenerator is significantlyhigher than the conditionsneeded to heat service hotwater for perimeter heating,preheat domestic hot water,preheat boiler feedwater,preheat ventilation air, orother typical building ther-mal loads. Electric power isfirst generated and thenthermal energy is recoveredfor use in a process that isapplicable for the site.

4) Heat load and power de-mand are simultaneous atthe plant.

5) Simultaneous demands forheat and power must bepresent for at least 4,500hours a year. The most cost

effective applications arethose that have 8,760 hoursper year.

6) Heat-to-Power ratio for theplant must not fluctuatemore than 10 percent.

7) Technology for implement-ing a CHP must be com-mensurate with plant’srequired Heat-to-Powerratio.

8) The viability of CHP de-pends on energy prices.The highest potential forCHP occurs when the utili-ties’ electricity prices arehigh (and rising) whileprices for natural gas arelow (and falling).

9) The economic feasibility of CHP is inversely relatedto the plant’s capital andmaintenance cost. In otherwords, the higher the capi-tal costs or the higher themaintenance costs, the lesslikely the CHP facility willbe economically feasible.

10) The CHP plant must ensurehighest availability.

The Big PictureThe correct application of CHP

represents a great opportunity toreduce greenhouse gas emissionsin the United States. CHP alsopresents an opportunity to not on-ly improve the bottom line forFederal facilities, but also to pro-vide a mechanism for improvingair quality.

The United States is takingsteps toward creating policies topromote CHP by establishing anational target. DOE and EPAhave begun to review the meansfor achieving this target. The tar-get now needs to be translated intoconcrete policies and programs atboth the Federal and state levelsfor overcoming the significanthurdles to greater use of CHP.

At the 1998 CHP Summit inWashington, D.C., Dan Reicher,Assistant Secretary, DOE’s Officeof Energy Efficiency and Renew-able Energy, challenged govern-ment and industry alike to moveforward with CHP initiatives andproliferate the implementation ofCHP projects across America.Reicher’s challenge included thefollowing:

• Develop a CHP vision to double the amount of energysupplied by 2010.

• Quantify the benefits of CHP.

• Share the benefits of CHPwith people throughout thecountry.

• Develop a roadmap outliningaction to take, analysis to per-form, public outreach to exe-cute, and niche markets toexplore.

• Measurement of CHP progress.

DOE and industry partners arewell on their way to educating,testing, and implementing CHPstrategies and will continue to doso until national CHP goals areachieved.

8.0 FederalProgramContacts

The importance by the Federalgovernment on CHP has been en-trusted to several offices withinDOE. This section provides thename of the primary person tocontact to obtain specific programinformation on CHP:

Federal Energy Management Program

Contact: Arun JhaveriSeattle Regional Office800 Fifth Ave., Suite 3950Seattle, WA 98104Phone: (206) 553-2152Fax: (206) 553-2200

Office of Industrial Technologies Contact: Thomas King1000 Independence Ave., SWWashington, DC 20585Phone: (202) 586-2387 Fax: (202) 586-3237

Office of Buildings Technology,State & Community Programs

Contact: Ron Fiskum1000 Independence Ave., SW,

EE-42Washington, DC 20585Phone: (202) 586-9154Fax: (202) 586-5557

Office of Power TechnologiesContact: Bill Parks1000 Independence Ave., SWWashington, DC 20585Phone: (202) 586-2093 Fax: (202) 586-3237

Pacific Northwest National Laboratory

MS K5-08P. O. Box 999Richland, WA 99352-0999Contact: Steven ParkerPhone: (509) 375-6366Fax: (509) 375-3614

Oak Ridge National LaboratoryP. O. Box 2008Oak Ridge TN 37831-6070Contact: Robert C. DeVaultPhone: (423) 574-0738Fax: (423) 574-9329

U. S. Department of EnergyEnergy Efficiency and Renewable Energy Clearinghouse (EREC)P. O. Box 3048Merrifield, VA 22116Phone: (800) 363-3732Web site: www.erec.doe.gov

DOE Regional Office (RO) FEMPTeam

Curtis Framel (Seattle RO) (206) 553-7841curtis.framel@hq.doe.gov

Sharon Gill (Chicago RO) (312) 886-8573sharon.gill@hq.doe.gov

Arun Jhaveri (Seattle RO) (206) 553-2152arun.jhaveri@hq.doe.gov

Randy Jones (Denver RO) (303) 275-4814randy_jones@nrel.gov

Paul King (Boston RO) (617) 565-9712paul.king@hq.doe.gov

Bill Klebous (Philadelphia RO inNY)(212) 264-0691william.klebous@hq.doe.gov

Claudia Marchione (PhiladelphiaRO)(215) 656-6967claudia.marchione@hq.doe.gov

Cheri Sayer (Seattle RO) (206) 553-7838cheri.sayer@hq.doe.gov

Dave Waldrop (Atlanta RO) (404) 347-3483david.waldrop@hq.doe.gov

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9.0 Manufacturers and Additional Sources of InformationNote: The firms listed below were identified as manufacturers of the technology at the time of this report’spublication. This listing does not purport to be complete, to indicate the right to practice the technology, or to reflect future market conditions.

CHP Technology Manufacturer

Natural Gas Engines Admic Controls(80 Kw – 130 Kw),Alston Energy Inc (750 Kw – 1.3 Mw),Alturdyne (25 Kw – 2 Mw),Caterpillar, (55 Kw – 3.4 Mw)Cooper Cameron Corp,(350 Kw – 6.5 Mw)Enerflex Power Systems,(50 Kw – 2.5 Mw)Katolight Corp, (up to 2 Mw)Lister-Petter Inc, (5 Kw to 400 Kw)Rolls-Royce Energy Systems,(3 Mw – 51 Mw)Synergy International, (up to 2 Mw)Tecogen,(60 Kw – 75 Kw)Wartsila NSD, (1 Mw – 16 Mw)Waukesha Engine Div,(6.5 kW – 3.3 Mw)

Fuel Cells Allied Signal,(Solid Oxide Fuel Cells)Analytic Power Corporation, ( Ammonia Cracker Hydrogen Source Fuel Cell - 2 Kw)Avista Corp., (2 Kw Polymer Electrolyte Membrane Fuel Cell)Ballard Power Systems,(Proton Exchange Membrane (PEM) Fuel Cell – 250 Kw) Energy Partners,(PEM up to 10 Kw)Energy Research Corporation,(Direct Fuel Cell – 2.5 Mw)H Power Corporation, (Proton Exchange Membrane Fuel Cells – up to 1 Kw) ONSI Corporation, (PC25™ Fuel Cell – 200 Kw) Plug Power, LLC, (Proton Exchange Membrane (PEM) Fuel Cell 7 Kw)

Turbines Solar TurbinesSiemensGEWestinghouse

Micro Turbines Capstone Turbine Corporation, (28 Kw)Honeywell Power Systems,(75 kW)Elliott/Bowman, (45 Kw and 65 Kw) Northern Research, (30 – 250 Kw)

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Advocates National Fuel Cell Research Center http://www.nfcrc.uci.edu/

Northeast-Midwest Institutehttp://www.nemw.org

American Council for Energy-Efficient Economyhttp://aceee.org/chp/

DOE CHP Challenge:http://www.oit.doe.gov/chpchallenge

U.S. Combined Heat & Power Associationhttp://www.nemw.org/uschpa

International Cogeneration Alliance (ICA)http://www.localpower.org/

Distributed Power Coalition of Americahttp://www.dpc.org/

Gas Research Institutehttp://www.gri.org

Software DG ProTM —Economic screening toolhttp://www.archenergy.com/dgpro/

Ergon—feasibility assessmentswww.ies4d.com/products/4DperformanceAssessmentTools/ergon/ergon.htm

energyPRO—optimization programhttp://www.emd.dk/energyPRO/default.htm

Publications The following 3 papers can be found at:http://www.nemw.org/uschpa/papers.htm

Combined Heat and Power: Saving Energy and the Environment

Federal Strategies to Increase the Implementation of Combined Heat andPower Technologies in the United States

An Integrated Assessment of the Energy Savings and Emissions-Reduction Potential of Combined Heat and Power

Combined Heat and Power (CHP), A Vision for the Future of CHP in the USin 2020http://www.nemw.org/uschpa/vision2020.pdf

The Role of Distributed Generation in Competitive Energy Marketswww.gri.org/pub/solutions/dg/distgen.pdf

Federal Technology Alert: Natural Gas Fuel Cellshttp://www.eren.doe.gov/femp/prodtech/pdfs/FTA_natgas_fuelcell.pdf

Guide to Community Heating and CHPwww.energy-efficiency.gov.ukpublication # GPG234

Note: This guide does not constitute an endorsement by FEMP or the Department of Energy of any of thesources listed below, as FEMP has not independently verified the information provided by the following advocates, software, or publications.

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Appendix A—Former Federal Combined Heat andPower Sites

Facility Location Federal Agency Technology Capacity

Brooklyn Naval Kings County, NY Navy/Marines Gas Turbines 315 MW

Argonne National Laboratory Idaho Falls, Idaho DOE NA 19.5 MW

Naval Medical Center San Diego, CA Navy/Marines Gas Turbine 2.3 MW

VA Medical Center San Diego, CA Dept. of Veterans Affairs Gas Turbine 880 KW

Naval Air Station,Point Mugu Port Hueneme, CA Navy Gas Turbine 1.6 MW

Naval Air Station,Point Mugu Port Hueneme, CA Navy Steam Turbine 775 KW

Naval Station San Diego, CA Navy/Marines Steam Turbines 2.54 MW

Fort Dix, NJ Burlington County, NJ Army Spark Ignition 30 KW

Naval Submarine Base New London, CT Navy/Marines Combined Cycle 20 MW

Naval Surface Warfare Center Indian Head, MD Navy/Marines Steam Turbine 10 MW

Naval Shipyard Norfolk, VA Navy/Marines Steam Turbines 60 MW

Naval Training Center Great Lakes IL Navy/Marines Steam Turbines 3 MW

Marine Corps Base Parris Island, CA Navy/Marines Steam Turbine 3 MW

North Island Naval Air Station San Diego, CA Navy/Marines Combined Cycle 36 MW

Naval Station San Diego, CA Navy/Marines Combined Cycle 36 MW

Naval & Marine Corps Recruit Training Center San Diego, CA Navy/Marines Combined Cycle 30 MW

Note: It is recognized that there are other DOD CHP facilities that are contractor owned and operated. As private corporations, the operators of these CHP facilities are not always willing to provide technical details.

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Appendix B—Federal Life-Cycle Costing Procedures and the BLCC Software

Federal agencies are required to evaluate energy-related investments on the basis of minimum life-cycle costs(10 CFR Part 436). A life-cycle cost evaluation computes the total long-run costs of a number of potential ac-tions, and selects the action that minimizes the long-run costs. When considering retrofits, sticking with theexisting equipment is one potential action, often called the baselinecondition. The life-cycle cost (LCC) of apotential investment is the present value of all of the costs associated with the investment over time.

The first step in calculating the LCC is the identification of the costs. Installed Costincludes cost of materialspurchased and the labor required to install them (for example, the price of an energy-efficient lighting fixture,plus cost of labor to install it). Energy Cost includes annual expenditures on energy to operate equipment. (Forexample, a lighting fixture that draws 100 watts and operates 2,000 hours annually requires 200,000 watt-hours(200 kWh) annually. At an electricity price of $0.10 per kWh, this fixture has an annual energy cost of $20.)Nonfuel Operations and Maintenanceincludes annual expenditures on parts and activities required to operateequipment (for example, replacing burned out light bulbs). Replacement Costsinclude expenditures to replaceequipment upon failure (for example, replacing an oil furnace when it is no longer usable). Because LCC in-cludes the cost of money, periodic and aperiodic maintenance (O&M) and equipment replacement costs, energyescalation rates, and salvage value, it is usually expressed as a present value, which is evaluated by

LCC = PV(IC) + PV(EC) + PV(OM) + PV(REP)

Where PV(x) denotes “present value of cost stream x,”IC is the installed cost,EC is the annual energy cost,OM is the annual non-energy O&M cost, andREP is the future replacement cost.

Net present value (NPV) is the difference between the LCCs of two investment alternatives, e.g., the LCC ofan energy-saving or energy-cost-reducing alternative and the LCC of the existing, or baseline, equipment. If thealternative’s LCC is less than the baseline’s LCC, the alternative is said to have a positive NPV, i.e., it is cost-effective. NPV is thus given by

NPV = PV(EC0) - PV(EC1)) + PV(OM0) - PV(OM1)) + PV(REP0) - PV(REP1)) - PV(IC)

Or NPV = PV(ECS) + PV(OMS) + PV(REPS) - PV(IC)

Where subscript 0 denotes the existing or baseline condition,subscript 1 denotes the energy cost saving measure,IC is the installation cost of the alternative (note that the IC of the baseline is assumed zero),ECS is the annual energy cost savings,OMS is the annual nonenergy O&M savings, andREPS is the future replacement savings.

Levelized energy cost (LEC) is the break-even energy price (blended) at which a conservation, efficiency,renewable, or fuel-switching measure becomes cost-effective (NPV >= 0). Thus, a project’s LEC is given by

PV(LEC*EUS) = PV(OMS) + PV(REPS) - PV(IC)

where EUS is the annual energy use savings (energy units/yr). Savings-to-investment ratio (SIR) is the total(PV) savings of a measure divided by its installation cost:

SIR = (PV(ECS) + PV(OMS) + PV(REPS))/PV(IC).

Some of the tedious effort of life-cycle cost calculations can be avoided by using the Building Life-CycleCost software, BLCC, developed by NIST. For copies of BLCC, call the FEMP Help Desk at (800) 363-3732.

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Appendix C—Acronym GlossaryAcronym Full TitleASHRAE American Society of Heating, Refrigerating and Air- Conditioning Engineers, Inc.

ATEP Advanced Turbine and Engine Program

BCHP Buildings Cooling Heating and Power

BLCC Building Life-Cycle Costing

CHP Combined Heat and Power

CO Carbon Monoxide

DOD Department of Defense

DOE Department of Energy

EPA Environmental Protection Agency

FEMP Federal Energy Management Program

FETC Federal Energy Technology Center

GOCO Government Owned/Contractor Operated

GRI Gas Research Institute

HHV Higher Heating Value

HRSG Heat Recovery Steam Generator

IC Engine Internal Combustion Engine

IEEE Institute of Electrical and Electronics Engineers

MCFC Molten Carbonate Fuel Cell

NOx Oxides of Nitrogen

NSR New Source Review

PAFC Phosphoric Acid Fuel Cell

PEM Proton Exchange Membrane

SOFC Solid Oxide Fuel Cell

STAC Steam Turbine Assisted Cogeneration

USACERL U.S. Army Construction Engineering Research Laboratory

USCHPA U.S. Combined Heat and Power Association

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