Plug & Play CHP? Is Your Pocket About to be Picked?

CHP Used to Only Be Available As Custom Designed and Site Built System Integration Prime over Heat recovery Parallel switchgear Thermal manifold Steam generator Chillers Diverters Cooling Monitoring On-site assembly Commissioning and testing Best suited for large industrial applications These are large installation costing 100’s of million for a 50 to 75MW generation facility with heat recovery. Custom designed central plant with specialized individually produced pieces of equipment. Example: Gas CT to HRSG turbine to steam turbine centrifugal chiller Cooperative July 30, 2015

Why Should Utilities Care? Customers Like It Reduces energy costs Improves reliability Keeps running during blackouts, hurricanes Price stability Utility opportunities and problems Low cost additional generation capacity T&D congestion relief EPA Clean Power Plant rule compliance Better than PV in several ways… Lost revenue potential Cooperative July 30, 2015

A Very Simple CHP Example Prime movers: Reciprocating engines Combustion turbines Steam turbines CHP Makes: Electricity Cold water Absorption or turbine chillers Steam Hot water Exhaust – high temperature for steam Jacket – close to boiling (absorption chiller) Thermal manifold – blend to suit Cooperative July 30, 2015

Competition from CHP Provider From: David V. Downes Sent: Friday, September 19, 2014 2:48 PM To: Alexander M. Grier Cc: Christopher S. Simms Subject: CHP   Lex Talk about Providential timing.  I got a call from CLIENT this afternoon to see if I could help them evaluate the impact to their system from loss of the hospital to a 1 MW cogen facility. I am getting information from CLIENT and will look at next week. How about that? Dave Cooperative July 30, 2015

There’s A New Game in Town Mr. Hospital Administrator – You pay a lot of money for Energy Electric, Heat, and Air Conditioning On Site Combined Heat and Power (CHP) There’s A New Game in Town Cooperative July 30, 2015

Here is what vendors can do! Packaged small foot printed pre-engineered CHP equipment Local operations and maintenance contracts with 24/7 monitoring Base load sized for thermal needs Cooperative July 30, 2015

Consider the possibilities Cost of natural gas fuel low Easily transportable Connects to existing system Low capital cost for installed capacity We can put together a financing package to keep things simple Cooperative July 30, 2015

CHP Planning and Operating Characteristics Designed not to have net export energy or excess thermal output Usually operates in parallel with grid CHP prime mover has high capacity factor Availability guarantee >90% not uncommon Maintenance in low demand periods Forced outages supported by your interconnection Cooperative July 30, 2015

To Summarize: 200 Bed Hospital pays $1.36 million in total annual electric cost to Utility-Revenue Hospital pays for fuel and maintenance of boilers for heat For tax exempt entity CHP Net Savings - $368,021/year IRR 17.6% on a $2.0 million investment For taxable entity CHP Net Savings - $461,547/year IRR 23.88% on a $1.8 million investment Cooperative July 30, 2015

What Does CHP Do to Utility Revenue and Capacity Requirements? Lost revenue from: Sales displaced by prime mover Sales lost for cooling heating Load factors could worsen 95% CHP capacity factor guarantees available CHP maintenance and forced outages still occur Cooperative July 30, 2015

Here’s Why Energy Served By Solar 20% 40% 60% 80% 100% Energy required by the customer is the area under the curve. If 600 KW of solar is added, the total energy provided by the Utility is affected in a minor way. If 600 KW of CHP is added, the energy provided by the Utility is nearly half of the total and the hourly delivery is much more variable. Power delivered 24 x 7 will drop. Energy Served By Solar 20% 40% 60% 80% 100% Cooperative July 30, 2015

Standby Charges Will Not Cure Revenue Erosion But Participation Can! Cooperative July 30, 2015

Hometown Electric Response? Do nothing Hope for the best React if threat is real Prepare and investigate to protect utility customers Establish standby rates Create new fixed cost allocation Consider dual metering with time of use rates Advise your power supplier of potential losses Reach out to major customers – be ready to go Check the pulse, temperature, and inclination of major customers Determine a business plan to participate, perhaps own and operate the CHP facility Negotiate with your power and fuel suppliers Cooperative July 30, 2015