6/5/2014 Tim Burkhalter Burns & McDonnell 1 Onsite Power Generation IS IT A GOOD DECISION FOR MY PLANT? Presented by: Kurt Koenig, Burns & McDonnell Lee Hoffman, Pullman & Comley Combined Heat and Power (CHP): The on-site simultaneous generation of two forms of energy from a single fuel/energy source OVERVIEW MARKET APPLICATIONS TYPICAL TECHNOLOGIES PROJECT DEVELOPMENT APPROACH ECONOMICS START TODAY RESOURCES
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6/5/2014
Tim Burkhalter Burns & McDonnell 1
Onsite Power Generation
IS IT A GOOD DECISION FOR MY PLANT?
Presented by:
Kurt Koenig, Burns & McDonnell
Lee Hoffman, Pullman & Comley
Combined Heat and Power (CHP): The on-site simultaneous generation of two forms of energy from a single fuel/energy source
HEAT RECOVERY POTENTIAL (RULES OF THUMB) GAS FIRED RECIPROCATING ENGINES
1.2 lbs/h of 100psig sat steam per kw
2.5-3.0 MMBtu of hot water per MW (jacket water and exhaust in series) GAS TURBINES
Unfired ~ 4.0-6.0 lbs/h of 100psig sat steam per Kw
Fired to 1600F ~ 2 x unfired capacity
TYPICAL TECHNOLOGIES
TYPICALLY A BALANCE BETWEEN SUMMER THERMAL LOAD AND WINTER ELECTRIC LOAD
If summer thermal load is small - limits prime mover size (cooling a possibility?)
If winter electric load is small – limits prime mover size (export?) TYPICALLY NO ELECTRIC EXPORT LIMITING FACTOR MAY CHANGE SEASONALLY HOURLY MODEL IS A MUST!
ELECTRICAL EFFICIENCY VS STEAM PRODUCTION TURN DOWN EMISSIONS PROFILES (SCR?) NOISE STARTS/STOPS SPACE REQUIRED DUCT FIRING CAPACITY INLET COOLING GAS PRESSURE
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STAGE 1 - QUALIFICATIONS
STAGE 2 – LEVEL 1 FEASIBILITY ANALYSIS
STAGE 3 – LEVEL 2 FEASIBILITY ANALYSIS
STAGE 4 – PROCUREMENT
PROJECT DEVELOPMENT
APPROACH DEVELOPMENT APPROACH
STAGE 1 - QUALIFICATION TIMELINE 1-7 Days KEY INPUTS Spark Spread Min/Max/Annual Loads Current Utility Operations Goals/Key Drivers DELIVERABLES Potential Annual Savings Calculation Go/No-Go Recommendation Level I Proposal
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DEVELOPMENT APPROACH
STAGE 2 – LEVEL 1 FEASIBILITY ANALYSIS
TIMELINE 4-8 Weeks
KEY INPUTS Rate Structures or Assumptions Thermal and Electric Load Profiles (prefer hourly) Current Asset Condition/Performance Growth Assumptions Financial Parameters Understanding of current operations/Permits Base Case Definition
Hourly Compensated Dispatch Model Detailed Rate Information/Escalation Load Growth Forecasts Avoided Costs Value for REC’s/Carbon Detailed Capital Cost Maintenance Costs Value for lost revenue Sensitivity/Risk Analysis
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
$18.00
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
An
nu
al
Co
st
/ S
avin
gs
($M
illio
ns)
Maintenance Capital Energy Savings
0.0
0.2
0.4
0.6
0.8
1.0
1.2
-
200
400
600
800
1,000
1,200
-$25 -$15 -$5 $5 $15 $25 $35 $45 $55 $65 $75 $85
Exceed
an
ce P
rob
ab
ilit
y
Fre
qu
en
cy
Option 2 NPV Savings vs. Base Case (Millions)
DEVELOPMENT APPROACH
STAGE 4 - PROCUREMENT DEVELOP BID PACKAGE PROCEED WITH DESIGN ONLY DESIGN-BUILD DESIGN-BUILD-OWN-OPERATE PROGRAM MANAGER/OWNERS ENGINEER COMMISSIONING
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PROJECT COSTS
TURBINE AND RECIP - $1500 TO $5000/KW
Existing Site?
Load available?
Prime Mover
Supporting Infrastructure/Distribution BACK PRESSURE STEAM TURBINE – $450 -$650/KW
Condensing turbine adds cost – condenser, towers, piping, water treatment, etc. MAINTENANCE COSTS – OEM VS THIRD PARTY
ECONOMICS
($1.7)
$2.9
$18.0
$2.1 $1.5
$0.0 $5.9
($15.2)($1.4)
($0.2)
($25.0)
($20.0)
($15.0)
($10.0)
($5.0)
$0.0
$5.0
$10.0
$15.0
Purchased
Electricity -
Energy
Purchased
Electricity -
Demand
Purchased
Electricity -
Standby
Purchased
Electricity -
Generation
Capacity
Natural
Gas
Non Fuel
O&M
Initial Capital
Thru 2016
Capital
After 2016
Cumulative
With
Current GHG
Policies
NP
V,2
01
3 $
MM
Incremental Cost Of Utility Service, NPV 2013$MM
Option 7 vs. Option 2, Expected Value
Savings, decrease in costIncrease in costEnding incremental present value
STATE INCENTIVES
CEFIA/Green Bank CHP Program
PROBABLY BEST BET FOR CHP IN CONNECTICUT
CEFIA is seeking proposals for grants, loans, loan enhancements or power purchase incentives Incentives vary based on technology and efficiency – cap is $450/kw REQUEST FOR PROPOSALS
Issued July 9, 2013 Applications available at www.energizect.com/chp Responses to RFPs due no later than February 27, 2015 at 5 pm ELIGIBLE APPLICANTS Almost anybody—except single family homeowners: For-profit companies Not-for-profit entities Municipalities State and federal agencies Colleges and Universities School districts Not-for-profit and for-profit affordable housing companies Public housing agencies
Focus is on projects that have large electrical and thermal loads Hospitals, POTWs, colleges and schools, manufacturing facilities and multi-family housing/hotels are all good bets CRITERIA FOR APPLICATIONS
Must be in development phase. NO construction Past grant winners, and LREC/ZREC winners are not eligible Systems must be 5 MW or less Systems must be commercially available CHP systems Located in UI or CL&P service territory Generate electricity for on-site use, but excess may be sold on the wholesale market The Financial Assistance Agreement must be taken “as is.”
STATE INCENTIVES
CEFIA/Green Bank C-PACE Program
“SQUARE PEG” – BUT OCCASIONALLY THERE IS A SQUARE HOLE
Commercial Property-Assessed Clean Energy Program Developed for energy efficiency projects, but can be used for CHP CRITERIA FOR PARTICIPATION
Must demonstrate energy savings sufficient to justify repayment Must be a permanent structure Must be in a municipality that has agreed to the C-PACE program Renewable CHP projects are best bets CHP projects that are peak shavers can be eligible
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STATE INCENTIVES
CEFIA/Green Bank C-PACE Program Geographic Scope
Source: www.energizect.com
STATE INCENTIVES
CEFIA/Green Bank C-PACE Program -- How it works:
Source: CEFIA
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FEDERAL INCENTIVES
NOT AS ROBUST AS STATE INCENTIVES, BUT AVAILABLE
BUSINESS ENERGY INVESTMENT TAX CREDIT FEDERAL LOAN GUARANTEES FOR ADVANCED FOSSIL ENERGY PROJECTS BUSINESS AND INDUSTRY GUARANTEED LOANS MODIFIED ACCELERATED COST-RECOVERY SYSTEM
SIMPLE METHOD
SPARK SPREAD = ELECTRIC COST ($/MMBTU) – GAS COST ($/MMBTU)
BREAKPOINT ~ 11-12 Gas Cost = $5/MMBtu Electric Cost = $0.10/kWh * 293 = $29.3/MMBtu Delta = 24.3 Gas Cost = $6/MMBtu Electric Cost = $0.06/kWh * 293 = $17.5/MMBtu Delta = 11.5