Opportunities for On-Site Industrial Renewable Energy David Sjoding Northwest Clean Energy Application Center April 21, 2010.

Opportunities for On-Site Industrial Renewable Energy

David Sjoding

Northwest Clean Energy Application Center

April 21, 2010

Alaska • Idaho • Montana • Oregon • Washington

Northwest Clean Energy Application Center

About the Center

• A multi-state effort – AK, ID, MT, OR & WA • WSU Extension Energy Program serves as lead• 100 plus Regional CHP projects totaling over 1,300 MWc • 94% industrial projects• Technical assistance information, reports and case studies• Problem solving & trouble shooting• Website www.northwestcleanenergy.org • Support of regional & state CHP initiatives• CHP, district energy and waste heat recovery

Alaska • Idaho • Montana • Oregon • Washington

Industrial Energy Efficiency and Renewables Fit Together

A major national effort is underway

• 25% Reduction in energy intensity by 2017 • Goal of U.S. Department of Energy Industrial Technologies Program• Goal of an 18% reduction in carbon intensity by 2018• Save Energy Now – Reduce energy intensity by 25% in 10 years – Lots of state energy office support

Alaska • Idaho • Montana • Oregon • Washington

Industrial Energy Efficiency and Renewables Fit Together

A major national effort is underway(cont.)

• Energy Intensity – Accommodates production variation• Excellent fit for CHP, district energy and waste heat recovery• Especially Renewable CHP• http://www1.eere.energy.gov/industry/

Alaska • Idaho • Montana • Oregon • Washington

CHP - Combined Heat and Power

National Industrial CHP Goals

• 241 GW by 2030 – 85 GW Today• 20% of U.S. electricity capacity for CHP – 9% today• CO2 Reduction of 848 MMT – 248 MMT today• Equivalent to 154 million cars off the road – 45 million today• How does this work? – CHP is very efficient 60-90%• It exceeds power production only systems• Needed policy and incentive changes vary by state and regionhttp://www1.eere.energy.gov/industry/distributedenergy/

Alaska • Idaho • Montana • Oregon • Washington

Where does CHP fit?

Both sides of the equation

• Is it an energy efficiency measure - Yes • Washington Energy Independence Act (I-937)• High efficiency CHP is included (33% thermal)

• Is it renewable? Yes, if from a renewable energy source• A major opportunity for pulp and paper/forest products

• Is it its own third category? Sometimes• Northwest Power Act treats CHP as a third priority behind energy efficiency and renewables

Alaska • Idaho • Montana • Oregon • Washington

Where does CHP fit?

Both sides of the equation(cont.)

• Waste heat recovery fit? – Hmm, energy efficiency• Organic Rankine Cycle – An emerging technology for the Northwest• Seattle City Light with Nucor Steel kudos

Alaska • Idaho • Montana • Oregon • Washington

Renewable CHP

• Pulp and Paper/Forest Products• Yields a competitive advantage• Rough & Ready Lumber, Cave Junction – 1.28 MW• Simpson Tacoma Kraft – 60 MW• Reduce the Moisture! – Biomass Drying & Dewatering for CHP - Moisture reduces efficiency• Ensure you have the wood waste supply – If you own it, you control it• Washington – 142 MW of CHP ARRA Stimulus Projects – Most are wood waste CHP

Alaska • Idaho • Montana • Oregon • Washington

Renewable CHP

• Food processing, WWTFs, dairies, high solids composting • Anaerobic digesters • Ensure the technology/design works• Northern Climate precludes some designs – Insulate• Scrub the biogas – Be kind the genset and use the H2S• Parasitic load concerns• Good history & Bad• Multiple revenue streams• Vander Haak Dairy in Lynden, WA – 9 Revenue Streams• No longer any reason for technology problems

Alaska • Idaho • Montana • Oregon • Washington

CHP Project Economics

Many options to improve the economics

• Buy all, Take all power purchase arrangements • CHP Wheeling – Need willing utilities – Sierra Pacific• Additional co-products• Tradable Renewable Energy Credits• Selling carbon credits – See NW CEAC report• Utility ownership co-location – Amalgamated Sugar in Nampa• Integrated resource plans for base case • Fulfilling RPS & EPS requirements• Selling carbon credits – See NW CEAC report

Key Point: The days of simple “What’s your power rate?” calculations are gone

Alaska • Idaho • Montana • Oregon • Washington

CHP Project Economics

And more options to improve the economics

• State incentive grants and loans• Federal grants and loans – USDA Rural Development, U.S. & ARRA• Tax reduction incentives• Utility incentives

Key Point: Work with the project economics to get a win!

Alaska • Idaho • Montana • Oregon • Washington

CHP Policies & Incentives

Kudos to Oregon• An amazing set of policies and incentives

• A key was the OPUC report: Distributed Generation in Oregon: Overview, Regulatory Barriers and Recommendations www.northwestcleanenergy.org See Policy - Oregon• Standby rates, PURPA, net metering, decoupling, IRPs and interconnection• Plus BETC, Energy Trust of Oregon, Climate Trust• Comparative OR study by Bill Carlson: “Biomass Power as a Firm Utility Resource: Bigger Not Necessarily Cheaper” • Interconnection grades: Oregon a ‘B’, Washington a “D” – Source is “Freeing the Grid” by IREC

Alaska • Idaho • Montana • Oregon • Washington

Contact information

• Northwest Clean Energy Application CenterDave Sjoding(360) [email protected]

• Regional list of Industrial Qualified Specialists – See www.northwestcleanenergy.org • Regional State Energy Office Industrial Programs

Christine LoveIndustrial Service Project Manager(360) [email protected] www.energy.wsu.edu See Industrial Services