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mCHP in North America Promise, Progress & Obstacles

mCHP in North America Promise, Progress & Obstacles. Dr. Samuel Bernstein Special Assistant to the Chairman National Grid, US Presentation at the GAS INDUSTRY MICRO CHP WORKSHOP PARIS, FRANCE 29 & 30 MAY, 2008. Outline. Why mCHP? Technology evaluation and demonstration

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mCHP in North America Promise, Progress & Obstacles

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  1. mCHP in North AmericaPromise, Progress & Obstacles Dr. Samuel Bernstein Special Assistant to the Chairman National Grid, US Presentation at the GAS INDUSTRY MICRO CHP WORKSHOP PARIS, FRANCE 29 & 30 MAY, 2008

  2. Outline • Why mCHP? • Technology evaluation and demonstration • The obstacles to mCHP • Conclusions The views expressed in this presentation are these of the author only and do not reflect National Grid policy

  3. mCHP advantage in the NE of USA • Climate Change Option • Regional Greenhouse Gas Initiative, (RGGI) (Cap and Trade Program including NY, NH MA & RI) • New York • City - 30% reduction by 2030 • State - 15% reduction by 2015 • Massachusetts – “Lead by Example“ Program (through 2080) • Energy Efficiency Option • Active Rebate Programs in MA, NH & NY • Cost to Benefit Metric (Based on Reduced Gas Consumption) • Offer an alternative to use of Oil & Electricity

  4. Issues Favoring Distributed Generation in the US • Environment & Global Warming • Increased Efficiency • LEED Points (at least 3 pts under EAc1) • Rate of Increase in Energy Costs • Massachusetts sell-back provisions • Net Metering & Interconnect • Being Actively Sought in NY & RI • Local Electric Distribution Limits • High Cost (especially Urban Areas) • Demand reduction programs • Concerns over EMF Radiation • Difficulties Siting New Power Plants • Community Opposition • Environmental Concerns (Air Emissions, Thermal Discharge)

  5. Why do customers want ‘on-site’ generation? • No Worries About Outages/Blackouts • Save Money on Energy Bills • Independence From Electric Utility • Greater Predictability of Energy Costs • Help the Environment • Home Office Needs • Medical Equipment Needs Consultant Survey

  6. As a key energy utility, National Grid is leading Climate and Energy Efficiency Programs in North America Service mix Largest energy distribution in the US Northeast Customers: • 4.5 Million Electric** • 3.3 Million Gas ** Includes 1.1 Million customers of the Long Island Power Authority Turn over ~ £11.5 Billion* * Does not include the commodity in the UK

  7. 1.0 1.0 0.8 0.8 Normalized Peak Electric Demand 0.6 0.6 Energy Consumption 0.4 0.4 Natural Gas 0.2 0.2 Electricity 0.0 0.0 J F M A M J J A S O N D Possible Advantage of mCHP to the utility service • Increased Overall Efficiency • Potential for Customer Savings • Environmental Benefits • To be verified.... • Potential for Electric Grid Support • Increase in Summer Gas Load TYPICAL SEASONAL VARIATION OF NATURAL GAS & ELECTRICITY ENERGY USE Normalized Natural Gas

  8. mCHP Technology options in North America • IC engines: Climate Energy / Honda (1 -1.2 kw) • Stirling Engines: (pre-com) Disenco (3kw) • Fuel Cells: (development) PEM and Advanced PEM: Plug- Power, Vaillant, Pemeas (3-5kw), Clear Edge Power (5kw)

  9. Field Evaluation of mCHP: • Beta Unit Testing: 19 sites in Eastern Massachusetts 2006/07 • Sample data • Totals for the heating season: Run Time: 3,968 hours; gas usage 732 Therms • Auxiliary Furnace Run Time: 450 hours; gas usage 360 Therms • Total Gas Usage: 1092 Therms • Electrical Generation: 3,968 kwh • Total Combined Heat Generated: 884 Therms • Fraction of Total Annual Heat Delivered by the mCHP: 62% • Total Combined Annual Efficiency: 93% • Energy Cost: $1,747 • Combined heat and Electric Energy Cost Savings: $756 • Reduction in CO2 Produced: 5,111 lbs. (2.5 tons)

  10. Current technology projects at IC (1/2) • Evaluation of mCHP market and market barriers in NY • 5 units test program (Climate Energy) • Joint project with

  11. Current technology projects IC (2/2) • Next generation mCHP unit for North America • Hot water capability • Back-up power capability • 40+ unit demonstration (NE US & Canada) • Joint project with • Performed with

  12. Current technology projects: Fuel Cells • Advanced high temperature PEM fuel cell demonstration • Joint project with • Project performed with

  13. Issues Stifling Distributed Generation • Electric Grid Connection • High cost (relay protection) • Reactive power limits/costs • Onerous approval processes • Customized application review • Insurance & liability • Site (not product) certifications • Electric standby-rates (One outage more than eliminates savings) • High Cost Equipment (Up to $4,000 per kW + Installation) • Poor Performance of Some Systems • Reliability (Maintenance Interval & MBTF < 1 year) • Emissions (excessive CO or NOX) • Fuel Price Volatility

  14. Regulatory Progress • Electric Grid Connection • Most States have published Standard Interconnect Requirements (SIRs), (limited to 300 kVA in NY) • IEEE 1547 type testing of grid protection devices universally recognized & UL Standard for Inverters – UIL 1741 • Special Gas Utility Rates for CHP for all size customers • New Emissions standards (California & proposed for NY) • Net Metering • Allows customer payback at rate paid for electricity (2-3 times avoided cost previously paid for) • Most states allow only for renewable but considering for all CHP. • Micro-turbines (Concern over on-board gas compressor)“New Standard for Safe Use and Installation of Energy-Efficient Microturbine Systems will enable Owners to Participate in PlaNYC Goal of Increasing Clean Power Generation” Mayor Bloomberg • Public Utility Commissions Investigating Disincentives to CHP in NY & MA • Electric & Gas Utility Financial De-coupling

  15. Active Discussion on Ways to Finance Distributed Generation • Government incentives • Federal & local • Rate-based Gas utility incentives • Transfer avoided cost from electric wires company to customer purchasing equipment • Rate Design • Offer electric load management rebates • Emissions reduction credits • NOX & SOX (aggregate) • Greenhouse gases • Share customer savings or energy sales model

  16. Conclusions • CHP has Tremendous Potential in All Sizes • mCHP Making Progress in US • Economic Obstacles Remain • International Cooperation can help in identifying best solution • Lower costs • Economies of scale • Innovation • Code harmonization

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