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CHP Project Costs Screening

CHP Project Costs Screening . Public Utility Commission of Ohio Combined Heat and Power: Financial Tools Workshop Columbus, OH August 2, 2012 Cliff Haefke. www.midwestcleanenergy.org. Outline. CHP project development process Qualifying a CHP system CEAC technical assistance.

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CHP Project Costs Screening

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  1. CHP Project Costs Screening Public Utility Commission of Ohio Combined Heat and Power: Financial Tools Workshop Columbus, OH August 2, 2012 Cliff Haefke www.midwestcleanenergy.org

  2. Outline • CHP project development process • Qualifying a CHP system • CEAC technical assistance

  3. U.S. DOE Midwest Clean Application Center originally established in 2001 by U.S. DOE and ORNL to support DOE CHP Challenge Today the 8 Centers promote the use of CHP, District Energy, and Waste Heat Recovery Technologies Strategy: provide a technology outreach program to end users, policy, utility, and industry stakeholders focused on: Market analysis & evaluation Education & outreach Technical assistance Midwest Website: www.midwestcleanenergy.org US DOE Regional Clean Energy Application Centers (CEACs)

  4. Advantages & Benefits of CHP • Remember… CHP does not make sense in every application, but when it does, it can provide the following benefits • Lower energy costs • Reduced energy consumption • Increased electric reliability • Standby power • Improved environmental quality • Good public relations • And more…

  5. Evaluating Facilities on an Individual Basis • All buildings and market sectors are not identical in terms of • Energy consumption • Energy demands • Operating schedules • Size of facilities • Geographic location • Electric and natural gas utilities • Environmental concerns • Therefore… it’s important to evaluate facilities individually!

  6. CHP Process Development Steps 12

  7. CHP Qualification Questions • Do you pay more than $.06/kWh on average for electricity (including generation, transmission and distribution)? • Are you concerned about the impact of current or future energy costs on your business? • Are you concerned about power reliability? Is there a substantial financial impact to your business if the power goes out for 1 hour? For 5 minutes?

  8. CHP Qualification Questions (2) • Does your facility operate for more than 5000 hours per year? • Do you have thermal loads throughout the year (including steam, hot water, chilled water, hot air, etc.)? • Does your facility have an existing central plant?

  9. CHP Qualification Questions (3) • Do you expect to replace, upgrade, or retrofit central plant equipment within the next 3-5 years? • Do you anticipate a facility expansion or new construction project within the next 3-5 years? • Have you already implemented energy efficiency measures and still have high energy costs?

  10. CHP Qualification Questions (4) • Are you interested in reducing your facility's impact on the environment? • Do you have access to on-site or nearby biomass resources (i.e. landfill gas, farm manure, food processing waste, etc.?

  11. Attractive CHP Markets Industrial • Chemical manufacturing • Ethanol • Food processing • Natural gas pipelines • Petrochemicals • Pharmaceuticals • Pulp and paper • Refining • Rubber and plastics Commercial • Data centers • Hotels and casinos • Multi-family housing • Laundries • Apartments • Office buildings • Refrigerated warehouses • Restaurants • Supermarkets • Green buildings Institutional • Hospitals • Landfills • Universities & colleges • Wastewater treatment • Residential confinement Agricultural • Concentrated animal feeding operations • Dairies • Wood waste (biomass)

  12. Collecting Site Information for a CHP Evaluation • Facility data and industry information • Facility motivation for CHP • Electric/thermal loads, needs, and costs • Major HVAC, electric, and thermal (heating & cooling) equipment

  13. Example Screening CalculationLoads & Assumptions * Typically 70-95%

  14. Example Screening Calculation (2)CHP System Assumptions

  15. Example Screening Calculation (3)Annual Energy Results

  16. Example Screening Calculation (4)Annual Operating Costs & Simple Payback

  17. CHP Market Development – Emerging Drivers • Growing recognition of CHP benefits by state and federal policymakers • Emissions regulations impacting non-utility boilers • Upward pressure on electricity prices • Favorable natural gas outlook OH Governor Kasich signing energy Senate Bill 315 Source: Akron Beacon Journal Online, 07/2012

  18. CHP Market Development – Emerging Drivers • Growing recognition of CHP benefits by state and federal policymakers • Emissions regulations impacting non-utility boilers • Upward pressure on electricity prices • Favorable natural gas outlook

  19. CHP Market Development – Emerging Drivers Upward Pressure on Electricity Prices • Growing recognition of CHP benefits by state and federal policymakers • Emissions regulations impacting non-utility boilers • Upward pressure on electricity prices • Favorable natural gas outlook 45+ GW of Coal Fired Utility Power Plants impacted by EPA regulations Source: ICF International

  20. CHP Market Development – Emerging Drivers Favorable Natural Gas Outlook • Growing recognition of CHP benefits by state and federal policymakers • Emissions regulations impacting non-utility boilers • Upward pressure on electricity prices • Favorable natural gas outlook Henry Hub Gas Prices Will Average Projected Between $5 and $6 per MMBtu Gas Prices at Henry Hub (2010$/MMBtu) Source: ICF International

  21. CHP Assistance from CEACs CEAC Capabilities • Qualification thru Feasibility Analysis • Consulting Expertise thru all Steps • Bringing customers and CHP engineering community together CEAC Project Support • Over 225 assessments & 700 tech support activities • Represents over 1.5 GW installed or in development 12

  22. Thank You www.midwestcleanenergy.org Cliff Haefke (312) 355-3476 chaefk1@uic.edu A program at A program sponsored by

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