Dan Kelley 2016-01-08 14:52:35
There are thousands of reported power outages each year. The largest cause of these interruptions is severe weather. Manufacturers need to determine how long they can go without production or supply basic functions like heating and cooling, or other essential services when the next big storm hits. When power delivery failure occurs, many facilities will not be ready to serve their community or their customers. To measure the impact of power lost on operations, the industry is starting to use a new key performance indicator—loss of revenue (LOR)—to aid in the financial analysis of projects. Facilities with distributed energy resources—the ability to generate power where it is used—that support some form of backup power or full microgrid capability will be able to deliver fundamental needs when centralized generators that serve the grid are shut down, or when transmission is disabled. Organizations are turning to combined heat and power (CHP) for a proven and effective approach to reducing risk to electricity supply disruptions, providing low-cost onsite electricity generation, and implementing environmental benefits. While a majority of CHP systems are found at industrial and commercial facilities, the systems can also be found at hospitals, hotels, apartment buildings, and college campuses. Facilities with CHP systems typically maintain a connection to the centralized power grid and receive some power from the local power utility to meet peak demand requirements, for backup reliability, or to supply power during planned maintenance of the CHP system. However, CHP systems can be set up to operate independently from the grid, which would allow a facility to operate partially or completely (depending on the design) during a local or regional power grid outage. The Economics of Choosing CHP A typical CHP system can operate at approximately 85–90% efficiency, as opposed to the 45% efficiency of traditional boiler- and powerplant-generated heat and electricity. The energy efficiency from a CHP solution comes from recovering the heat that would normally be wasted while generating power to supply heating or cooling needs. Moreover, since power is produced onsite, transmission and distribution losses from the electric utility through the grid (on average 7%) are also avoided. Greater efficiency also means a net reduction of CO2 emissions and other pollutants, producing a significant environmental benefit. CHP systems are usually installed at facilities in areas where utility-delivered electricity rates are high, fuel costs are low, and the facility has needs for both electricity and thermal energy. Project economics are often compelling where a heat application can be found as part of a CHP project. A CHP system is designed to match the thermal or electrical load at a facility. When it is the former, any excess or lack of electrical power can be delivered to or purchased from the grid. It is also possible to design a system that not only delivers heat, but also can use an absorption cycle chiller to convert hot thermal output from the CHP plant to a chilled water supply for use in cooling. Where applicable, combining federal, local, and state incentives and resiliency funding with utility rebates, forward capacity payments, and energy credits can yield simple paybacks that are as low as two years. Furthermore, by creating greater independence from the centralized grid, facilities are better able to weather energy price volatility. Conducting a Feasibility Analysis EPA and Department of Energy (DOE) outline three primary tasks for a Level 1 feasibility analysis. The first task is to identify barriers. In this task, the recommendation is to determine any uncontrollable factors that prevent or impede the installation of a CHP system. For example, an organization may have an existing contract for power that prevents or makes impractical distributed power generation. The next task is the development of conceptual engineering. In this step, an organization should look at estimated electric and thermal loads at the site. The objective here is to propose a system that provides the greatest efficiency and cost savings. Several approaches may make sense, but generally, thermal base loading is the objective. The final task, a preliminary economic analysis, looks at equipment pricing, estimated fuel use, energy savings, installation costs, and other financial factors. A critical factor for many facilities is an estimation of the payback period. A Real-World CHP Example A Fortune 100 beverage client engaged Woodard & Curran to be part of the team to identify an opportunity to collect gas from a nearby-decommissioned landfill and convert the methane into energy. The firm completed a feasibility study and engineering design for a cogeneration system to produce electricity, heat energy, and chill water, which helped the client achieve its two-pronged goal of creating a process that is financially intelligent and environmentally conscious. Woodard & Curran was part of a multi-discipline project team that worked with the client to design, engineer, and oversee the construction of a 6.6-MW CHP system. To begin, the design team reviewed the facility’s current energy consumption and outlined future potential patterns to determine facility demands. The analysis included a supply-demand capacity analysis showing chilled water demands. The team also analyzed potential equipment solutions and determined a reciprocating engine would be the most effective method of providing energy to the facility. The CHP system includes three industrial size engines, each capable of producing 2.2 MW of electricity to offset the process load energy required for an onsite plastic molding process. In addition, three large heat recovery steam generators take engine exhaust gas from the CHP system to generate steam. This steam is then piped into the facility for facility process HVAC use. The steam is also piped to a steam-driven turbine chiller, which cools water used in facility process and the HVAC system. Considering Boiler Replacement? There are a number of issues that lead facility operators to consider boiler replacement, such as increased maintenance costs for older boilers, new regulations that require investments in existing infrastructure (e.g., EPA’s Major Source Boiler MACT requirements), efficiency or sustainability objectives, or steam demands that exceed a current boiler’s capacity. According to EPA, nearly one-half of boilers with a capacity greater than 10 MMBTU per hour operating in the US are at least 40 years old. A facility may be a good candidate for a CHP solution if there is a plan to replace, upgrade, or retrofit central plant equipment or boilers and/or complete a facility expansion within the next three to five years. It’s important to note that replacing a coal- or oil-fired boiler with a natural gas-fired boiler or CHP system may require an emissions assessment and a modification of a facility’s air permit. Conclusion: The Outlook for CHP According to the DOE, more than two-thirds of the fuel used to generate power in the US is lost as heat. The DOE and EPA also report that while only 8% of electric power generated comes from CHP systems, it saves users an astonishing $5 billion each year in energy costs. There is the potential in this country to do a lot more. Countries such as Denmark, Finland, and the Netherlands generate 30% of their power from CHP systems. Despite being a proven technology, CHP remains underutilized. A number of obstacles hinder the implementation of cost-effective CHP, such as current market conditions, technical barriers, and emissions regulations that don’t recognize the efficiency of CHP. More needs to be done to publicize the benefits of CHP, and the government is beginning to step into that role. The federal government has set a goal to achieve 40 GW of new CHP-produced power by 2020. This would increase total CHP capacity by 50%, reduce emissions by the equivalent of taking 25 million cars off the road, save manufacturers and companies $10 billion each year, and save 1 quadrillion BTUs of energy annually, which represents 1% of all energy use in the US. In addition, a number of states have initiated incentive programs for CHP. For example, in Massachusetts, the Green Communities Act of 2008 created incentives for CHP projects. California, New York, and New Jersey have similar programs, and many states recognize CHP in one form or another as part of their Renewable Portfolio Standards or Energy Resource Standards. EPA provides an online database that allows users to search for CHP policies and incentives by state or at the federal level. Organizations that provide critical resources yet experience frequent power outages, or are vulnerable to severe weather-related outages, are good candidates for distributed generation solutions, such as CHP. Furthermore, CHP systems improve power resilience by providing low-cost onsite electricity generation, limiting congestion, enabling load reduction, and offsetting transmission losses. These benefits, and more, indicate that CHP is a practical means for facilities to generate cleaner energy and reduce energy costs. Dan Kelley is a Senior Vice President and Service Line Leader for Energy and Power Engineering services at Woodard & Curran in Portland, ME.
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