1. Phoenix Convention Center Phoenix, Arizona Combined Heat & Power – The Basics Integrated Energy Combined Heat & Power (Making a Comeback) Bob Albertini Pepco Energy Services August 11, 2015

2. Energy Exchange : Federal Sustainability for the Next Decade Combined Heat & Power Overview Overview – Basic concept – Typical configuration & components Benefits Characteristics of a good opportunity Market drivers Case studies

3. Energy Exchange : Federal Sustainability for the Next Decade CHP Overview – Distributed Generation Distributed Generation: – An electric generator; – Located at-or-near the end user; – Generates at least a portion of the electric load Typical DG Technologies: – Engine Generators – Turbine Generators – Solar Photovoltaic – Wind Turbine – Fuel Cells

4. Energy Exchange : Federal Sustainability for the Next Decade CHP – Basic Concept CHP is: – A specific type of Distributed Generation – The simultaneous production of electricity and heat from a single fuel source – An integrated energy system (not a single technology) that can be modified depending upon the needs of the energy end user – Highly efficient CHP: – 70% to 80% Separate Elec. & Thermal – 40% - 50% ‒Can use various Fuels: Natural Gas Landfill/Biogas Biomass

5. Energy Exchange : Federal Sustainability for the Next Decade Thermally Activated Machine “Prime Mover” CHP – Typical Configuration Use fuel to first Generate Power, then Capture resulting heat for use as: – Heating – Cooling – Both

6. Energy Exchange : Federal Sustainability for the Next Decade Prime Movers (Converts fuel input to mechanical shaft power) – Reciprocating Internal Combustion (IC) Engine – Combustion Turbine – Steam Turbine – Microturbine Electrical Equipment – Generator (Converts mechanical shaft power to electrical energy) – Step-up transformer & grid interconnection gear Heat Recovery Equipment – Heat recovery steam generator (HRSG) Thermally Activated Machine/Thermal Load – Energy transfer stations/air handling units – Process Heat – Economizer – Absorption or steam driven chillers CHP – Typical Components IC Engine Microturbine HRSG Transformer Absorption Chiller Combustion Turbine

7. Energy Exchange : Federal Sustainability for the Next Decade 7 Reciprocating IC Engine Gen. Combustion Turbine Steam TurbineMicroTurbine Advantages Fast Start up Hi part load efficiency Island mode capable Operates on low pressure gas High Reliability Low Emissions High-grade Heat No cooling required High overall efficiency Any fuel type Long working life High reliability Small # of moving parts Compact size & wt. Low emissions No cooling required Disadvantages High maintenance costs Low temperature thermal output Higher emissions Needs cooling Requires gas compression Poor efficiency at low loads Output varies w/ ambient temp Slow start up Low power to heat ratio High costs Low temp. thermal output Lower mech. Efficiency Typical Sizes< 5MW500kW – 300MW500kW – 300MW+30kW – 1MW Installed Costs $/kW 1,500 – 2,9001,200 – 3,300670 – 1,1002,500 – 4,300 O&M Costs ¢ /kWh 0.9 - 2.50.9 - 1.3 0.6 – 1.00.9 – 1.3 Availability92% – 97%90% – 98%Near 100%90% – 98% Part LoadOKFair - PoorOK CHP – Typical Components – Prime Movers

8. Energy Exchange : Federal Sustainability for the Next Decade Electrical Generator ‒Converts mechanical shaft power to electricity ‒Typical output voltage IC Engine: 480V – 4,160V Gas/Steam Turbines: 4,160V – 13,800V Microturbines: 480V ‒Typically synchronous Can produce power during grid blackouts Grid interconnection ‒Several Grid Interconnection Standards IEEE 1547; FERC Order 2006; State-specific standards ‒Required for safety, grid integrity, equipment protection ‒Parallel Operation is typical/preferred Export mode  Flexible CHP system sizing Non-export mode  Load following 8 Generator on IC Engine CHP – Typical Components – Electrical Equipment Switchgear

9. Energy Exchange : Federal Sustainability for the Next Decade Heat is recovered from: ‒Hot water ‒Hot exhaust gas ‒Steam Typical uses: ‒Jacket water  Boiler economizer, space/process heating ‒Exhaust gas  Heat recovery steam generator (HRSG) Steam  Energy transfer stations Air handling units Absorption/steam chillers Industrial processes 9 Absorption Chiller Air Handling Units Economizer HRSG CHP – Typical Components – Heat Recovery

10. Energy Exchange : Federal Sustainability for the Next Decade Why Pursue a CHP Project? Reduced Energy Costs – Efficient Fuel Utilization – Waste Heat captured for useful work – No transmission and distribution losses Improved Electric Reliability – Reduced susceptibility to grid failures Improved Energy Security – Generation is “on-site” – Particularly applicable to Military Bases Improved Power Quality – Reduced line losses/steady voltage Energy Distributions for a Typical Reciprocating Engine Shaft Power to Drive Load (30%) Jacket Coolant (30%) 150 o F – 250 o F Exhaust (20%) 850 o F Exhaust Not Recovered (15%) Radiation (5%) Fuel Input Energy (100%) Recoverable Energy (80%)

11. Energy Exchange : Federal Sustainability for the Next Decade What Makes a Good CHP Opportunity? Combination of Technical, Financial, Regulatory Factors Technical – Long operating hours (>5000 hrs/yr) – High, coincident, electrical & thermal loads (>4000 hrs/yr) – Existing and aging central plant – Power quality/reliability issues Economic/Financial – Wide spark spread – Low or no standby charges/penalties – Access to Funding/Financing ESPC’s/UESC’s Utility Rebates and Incentives Regulatory/Utility – Favorable permitting environment – Simple, clear, fair interconnection requirements Strike Zone

12. Energy Exchange : Federal Sustainability for the Next Decade CHP Market Driver – Stable, Low Gas Prices Henry Hub Gas Prices expected to Remain between $3.00 and $6.00 thru 2030 ICForecast: Natural Gas – Strategic Forecast, Q3 (July) 2015 Base Case

13. Energy Exchange : Federal Sustainability for the Next Decade 13 Spark Spread Improving for CHP $/MMBTU Cents/kwh Historical Forecast Spark Spread

14. Energy Exchange : Federal Sustainability for the Next Decade UESC Financed Project PES designed, permitted and built SGT-600 23MW combustion turbine – Inlet air cooling – 1200 HP gas compressor Dual fuel capability 100,000 lbs/hour steam unfired 180,000 lbs/hour steam fired Interfaces to existing systems Interconnect with PEPCO/PJM 15 year O & M contract Provision for Temporary boilers 2011 CHP Energy Star Award 14 CHP Case Study – National Institutes of Health (NIH)

15. Energy Exchange : Federal Sustainability for the Next Decade Solar Taurus 60 5.7MW Combustion Turbine – Dual fuel Capability – Inlet air cooling Turbine heat recovery provides base load steam demands – 27,000 lbs/hour steam unfired – 65,000 Lbs/hour steam fired 350 HP gas compressor Power export – Interconnect ACE/ PJM PES designed, permitted, built Reduces overall site emissions 2015 CHP Energy Star Award 15 CHP Case Study – PES Owned Midtown Thermal Plant

16. Energy Exchange : Federal Sustainability for the Next Decade 15 MW Combined Heat and Power (CHP) facility – Three 4.6 MW Solar Mercury 50 low-nitrogen oxide gas turbines – Digester gas cleaning and compression – Heat recovery steam generators, duct burners – Backup boiler Uses biogas from DC Water’s water treatment process to produce steam and electricity – Steam returned and used in DC Water’s treatment process Contract value – Construction: $82 million – O&M: $90 million Schedule – Contract signed February 2012 – Construction begins Summer 2012 – Construction completion August 2015 15-year O&M Phase begins 16 CHP Case Study – DC Water

17. Energy Exchange : Federal Sustainability for the Next Decade 17 Questions & Contact Information Bob Albertini Pepco Energy Services balbertini@pepcoenergy.com 708-710-5645

18. Energy Exchange : Federal Sustainability for the Next Decade CHP – Fuels & Applications CHP can use many fuels: – Natural Gas – Landfill Gas – Digester Gas – Industrial and municipal waste streams – Wood, agricultural wastes, & other biomass – Industrial Waste Heat CHP works in many applications: – Campus/District Energy Systems Military Installations Hospital Campuses – Commercial building integrated systems – Industrial cogeneration & waste heat recovery