1 Pre-Conference Webinar: Combined Heat and Power in the SoutheastOctober 13th, 2016
2 SEEA Serves the Southeast
3 The SEEA & AESP SE Conference
4 Upcoming Webinars The National Energy Efficiency RegistryNovember 10th, 2016 Missed one? Find webinar materials at
5 GoTo Webinar InstructionsOpen And Hide Your Control Panel Join Audio Choose “Mic & Speakers” to use VoIP Choose “Telephone” and dial using the information provided Questions Submit questions and comments via the Questions panel Speaker: Cyrus Give Attendees a closer look at the control panel and how they can participate. Text may be adjusted to suit your event needs. Note: Hand Raising is enabled (see slide 3) Visit the “Options” menu in the Organizer control panel a check to allow attendees to Raise Hands.
6 Speakers Meegan Kelly ACEEE Anne Hampson ICF
7 Combined Heat and Power in the SoutheastA pre-conference webinar October 13, Anne Hampson Senior Manager ICF
8 Over Two-Thirds of the Fuel Used to Generate Electrical Power in the UOver Two-Thirds of the Fuel Used to Generate Electrical Power in the U.S. Is Lost as Heat SEEA Webinar - CHP in the Southeast
9 What is Combined Heat and Power?CHP is an integrated energy system that: Generates electrical and/or mechanical power Recovers waste heat for: Space heating Water heating Space cooling Dehumidification Is located at or near a factory or building that can use the energy output Can utilize a variety of technologies and fuels CHP is also known as cogeneration SEEA Webinar - CHP in the Southeast
10 Defining Combined Heat & Power (CHP)The on-site simultaneous generation of two forms of energy (heat and electricity) from a single fuel/energy source Conventional CHP (also referred to as Topping Cycle CHP or Direct Fired CHP) Separate Energy Delivery: Electric generation – 33% Thermal generation - 80% Combined efficiency – 45% to 55% CHP Energy Efficiency (combined heat and power) 70% to 85% SEEA Webinar - CHP in the Southeast
11 Defining Combined Heat & Power (CHP)The on-site simultaneous generation of two forms of energy (heat and electricity) from a single fuel/energy source Waste Heat to Power CHP (also referred to as Bottoming Cycle CHP or Indirect Fired CHP) HRSG/Steam Turbine Organic Rankine Cycle Backpressure Turbine Fuel first applied to produce useful thermal energy for the process Waste heat is utilized to produce electricity and possibly additional thermal energy for the process Simultaneous generation of heat and electricity No additional fossil fuel combustion (no incremental emissions) Normally produces larger amounts electric generation (often exports electricity to the grid; base load electric power) Waste heat from the industrial process Fuel Electricity Energy Intensive Industrial Process Heat Heat recovery steam boiler Steam Turbine SEEA Webinar - CHP in the Southeast
12 CHP in the U.S. Represents a Variety of Fuels, Technologies, Sizes, and ApplicationsIndustrial Institutional Residential Utility Scale Commercial SEEA Webinar - CHP in the Southeast
13 CHP Today in the U.S. SEEA Webinar - CHP in the Southeast81 GW of installed CHP at over 4,300 industrial and commercial facilities 8% of U.S. Electric Generating Capacity; 14% of Manufacturing Avoids more than 1.8 quadrillion Btus of fuel consumption annually Avoids 241 million metric tons of CO2 compared to separate production DOE/ICF CHP Installation Database (U.S. installations as of Dec. 31, 2015) SEEA Webinar - CHP in the Southeast
14 What Are the Benefits of CHP?CHP is more efficient than separate generation of electricity and thermal energy Higher efficiency translates to lower operating costs Higher efficiency reduces emissions of all pollutants, including CO2, NOX, and SO2 CHP can increase power reliability and enhance power quality On-site electric generation can help reduce grid congestion SEEA Webinar - CHP in the Southeast
15 CHP Is a Clean, Efficient Method of Providing Energy ServicesSource: EPA CHP Partnership SEEA Webinar - CHP in the Southeast
16 CHP’s Increased Efficiency General Results in Lower EmissionsSource: EPA CHP Partnership SEEA Webinar - CHP in the Southeast
17 CHP Is Used at the Point of DemandDOE/ICF CHP Installation Database (U.S. installations as of Dec. 31, 2015) SEEA Webinar - CHP in the Southeast
18 CHP Installations Less than 100 MW Represent an Increasing Share of New CapacitySEEA Webinar - CHP in the Southeast
19 CHP’s Higher Efficiency Results in Energy and Emissions SavingsCategory 10 MW CHP 10 MW PV 10 MW Wind 10 MW NGCC Annual Capacity Factor 85% 22% 34% 70% Annual Electricity 74,446 MWh 19,272 MWh 29,784 MWh 61,320 MWh Annual Useful Heat Provided 103,417 MWht None Footprint Required 6,000 sq ft 1,740,000 sq ft 76,000 sq ft N/A Capital Cost $20 million $60.5 million $24.4 million $10 million Annual Energy Savings, MMBtu 308,100 196,462 303,623 154,649 Annual CO2 Savings, Tons 42,751 17,887 27,644 28,172 Annual NOx Savings 59.9 16.2 24.9 39.3 Source: Combined Heat and Power: A Clean Energy Solution, August 2012, DOE and EPA SEEA Webinar - CHP in the Southeast
20 Drivers for CHP Growth Benefits of CHP recognized by Federal and State policymakers White House Executive Order: 40 GW by 2020 Increasing state interest (Ohio, Maryland, New Jersey, etc.) Game changing outlook for natural gas supply and price in North America Resulting growth in the industrial sector Opportunities created by environmental drivers Clean Power Plan Pressures on utility coal and oil capacity CHP offers resiliency options when faced with man-made and natural disasters SEEA Webinar - CHP in the Southeast
21 Federal Support for CHPExecutive Order: “Coordinate and strongly encourage efforts to achieve a national goal of deploying 40 gigawatts of new, cost-effective industrial CHP in the United States by the end of 2020.” DOE focuses technology deployment support for CHP—TAPs and SEEAction—Regional meetings in support of Executive Order EPA recognizes CHP as an efficiency measure under developing greenhouse gas emission standards and promoting output-based options that recognize CHP benefits (ICI Boiler MACT and Utility MACT (MATS), and Clean Power Plan) FERC pressing to open ancillary services markets to DG and CHP SEEA Webinar - CHP in the Southeast
22 CHP Provides Energy Reliability and Resiliency BenefitsTraditional backup generators do not always perform during emergencies A system operating on a daily basis (CHP) is more reliable CHP provides continuous benefits to hos facilities, rather than just during emergencies CHP systems that kept running during Sandy: South Oaks Hospital – Amityville, NY, 1.25 MW The College of New Jersey – Ewing, NJ, 5.2 MW Public Interest Data Center – New York, NY, 65 kW Bergen County Wastewater Plant – Little Ferry, NJ New York University – New York, NY Sikorsky Aircraft Corporation – Stratford, CT SEEA Webinar - CHP in the Southeast
23 Critical Infrastructure Facilities That Benefit from CHPHealthcare Hospitals, nursing homes Wastewater Treatment Plants Facilities of Refuge College campuses, schools, community centers Hotels with kitchens, laundries Food distribution, including cold storage and supermarkets Communications/Data Centers Public Safety Jails/prisons, fire/EMS Transportation Centers (Airports) SEEA Webinar - CHP in the Southeast
24 The Potential for Additional CHP is Nationwide<1,000 MW 1,000-3,000 MW 3,000-5,000 MW >5,000 MW Source: U.S. Dept. of Energy, “Combined Heat and Power in the United States”, prepared by ICF International, March 2016. SEEA Webinar - CHP in the Southeast
25 Where is the Remaining Potential for CHP?Source: U.S. Dept. of Energy, “Combined Heat and Power in the United States”, prepared by ICF International, March 2016. SEEA Webinar - CHP in the Southeast
26 CHP Technical Potential - SoutheastTechnical Potential by State (MW) Technical Potential by Application (MW) SEEA Webinar - CHP in the Southeast
27 Anne Hampson ICF [email protected] 703-934-3324Thank you Anne Hampson ICF
28 Combined Heat and Power in the Southeast A pre-conference webinarMeegan Kelly Senior Research Analyst, Industry Program ACEEE October 13, 2016
29 The American Council for an Energy-Efficient Economy (ACEEE)ACEEE is a 501(c)(3) nonprofit that acts as a catalyst to advance energy efficiency policies, programs, technologies, investments, & behaviors 50 staff; headquarters in Washington, D.C. Focus on end-use efficiency in industry, buildings, & transportation Other research in economic analysis; behavior; energy efficiency programs; & national, state, & local policy Funding: Foundation Grants (52%) Contract Work & Gov’t. Grants (20%) Conferences & Publications (20%) Contributions & Other (8%)
30 Overview CHP in the 2016 State Energy Efficiency ScorecardPolicies from highest ranking states Snap shot of CHP policy in the Southeast Opportunities to advance CHP in the Southeast region Utility-ownership model Trends in the Southeast
31 2016 State Energy Efficiency ScorecardUtility programs and policies Combined heat and power Transportation policies State government-led initiatives Building energy codes Appliance and equipment efficiency standards Source: Berg, et al 2016:
32 CHP Scorecard MethodologyMetric Points Interconnection standards pts Encouraging CHP as a resource pts EERS treatment (0.5 pts) CHP resource acquisition programs (0.5 pts) Production goal (0.5 pts) Revenue streams (0.5 pts) Deployment incentives pts Other supportive policies pt Total pts
33 Highest ranking states on CHPCA, MD, MA earned full 4 points All allow CHP within EERS, offer deployment incentives, and have supportive policies Encouraging CHP as a resource State Interconnection (0.5) EERS treatment (0.5) CHP Programs (0.5) Production Goal (0.5) Revenue streams (0.5) Deployment Incentives (0.5) Supportive Policies (1) Score (4) California 0.5 1 4 Maryland Massachusetts New York 3.5 Rhode Island Maine 3 Connecticut 2.5 Minnesota Oregon Pennsylvania Washington Source: Berg, et al 2016:
34 Southeast state scores for CHPFL, NC, and TN earn high scores in region Most states have supportive policies CHP is not currently prioritized as an energy resource in Southeast Encouraging CHP as a resource State Interconnection (0.5) EERS treatment (0.5) CHP Programs (0.5) Production Goal (0.5) Revenue streams (0.5) Deployment Incentives (0.5) Supportive Policies (1) Score (4) Florida 0.5 1 North Carolina Tennessee Georgia Kentucky Louisiana Mississippi Alabama Arkansas South Carolina Source: Berg, et al 2016:
35 Recent CHP installations in SoutheastSource: US DOE CHP Installation Database (as of December 31, 2015)
36 Recent CHP policy action in SoutheastNorth Carolina: Expiration of tax credit for CHP systems at the end of 2015; NCUC ruling that only waste heat component of topping cycle CHP meets definition of EE measure. Mississippi: “Combined Heat and Power: Opportunities and Barriers” study completed and findings released in 2016. Tennessee: In 2015, TVA issued a request for proposals to industrial customers to provide up to $7 Million for at least 5 MW of customer-owned generation from CHP.
37 Learn about CHP policies in your stateACEEE State and Local Policy Database g/
38 Opportunities to encourage CHP in statesDefine CHP as an eligible technology for meeting state EE or RE goals Develop complementary programs designed to acquire CHP resources *Engage utilities as dedicated partners*
39 Two ways to plan and deploy CHP to maximize system benefitsCustomer-ownership Model Utility-Ownership Model CHP installed by customers for onsite benefits at their facilities State policy encourages utilities to incentivize CHP systems for energy savings and additional benefits Customer invests in CHP with financial support from utility CHP installed by utilities at customer sites for overall system benefits Investments are regulated assets and included in utility resources planning activities Utility invests in CHP and customer takes useful thermal energy
40 What are the benefits of utility-owned CHP?Cheaper than other supply alternatives Alleviates grid constraints Avoid investments in transmission and distribution infrastructure Less risky investment overall More reliable and resilient power for customer Better service and value for customers Air quality improvements and carbon reductions Encourages economic development
41 Utility ownership trends in FloridaFlorida Public Utilities built, owns, and operates a 20 MW CHP system at a large customer site providing: electricity to Amelia Island residents steam to Rayonier pulp mill PSC Chair praises utility- owned CHP business model Florida: Art Graham, Chairman of the Florida Public Service Commission, spoke at the groundbreaking ceremony for Eight Flags Energy, a Combined Heat and Power venture with Florida Public Utilities and Rayonier Advanced Materials. Eight Flags Energy LLC and Florida Public Utilities Company are wholly-owned subsidiaries of Chesapeake Utilities Corporation In Florida, Florida Public Utilities recently commissioned a 20MW CHP plant located on Amelia Island, serving an adjacent manufacturing facility with thermal energy and providing the local grid with a cost-effective power generation asset. The power is being purchased by FPU through a 20-year power purchase agreement, providing FPU customers with low cost, reliable power. The plant is estimated to provide FPU customers with total savings of about $28 million over the course of its life. The project also displaces over 50,000 tons CO2, 25% of NOx and 100% of SO2. Source: https://www.youtube.com/watch?v=K2LSkEMKn70&feature=youtu.be
42 Utility ownership trends in CarolinasDuke Energy added 40 MW of CHP to its Integrated Resource Plans (IRP) Duke Energy, Duke University partner to propose 21 MW campus CHP system Carolinas: Duke Energy is exploring and working with potential customers with good base thermal loads on a regulated Combined Heat and Power offer. The CHP asset will be included as part of Duke Energy’s IRP as a placeholder for future projects as described below. The steam sales are credited back to the revenue requirement of the projects to reduce the total cost of this generation grid resource. Along with the potential to be a competitive cost generation resource, CHP can result in CO2 emission reductions, and present economic development opportunities for the state. Projections for CHP have been included in the following quantities in the 2015 IRP:2018: 20 MW; 2020: 20 MW Duke Energy has also proposed to own, build, and operate a 21 MW CHP facility on the campus of Duke University
43 Utility ownership trends in AlabamaAlabama Power already owns 500 MW of CHP in its service territory, primarily at large industrial facilities PSC approval of utility request for need to procure MW of RE/CHP Alabama: Alabama Power owns customer-sited CHP in its service territory. There are 2000 MW of CHP in their service territory in total. About one-fourth of that is company-owned CHP at large industrial sites. Alabama Power sought a certificate of need from the PSC to acquire renewable energy and “environmentally specialized generating resources” (CHP) last year and the Commission granted their petition. It was unique in that the goal of the goal of Alabama Power was primarily to meet customer interest (there are some federal facilities and military bases that want to use CHP to meet their targets for savings energy), rather than reliability needs, but the commission found it would provide economic benefits to all customers and approved it. The remaining utility-owned CHP is composed of four large units located at industrial sites, including: • 97 MW combined-cycle cogeneration plant located at Sabic Plastics in Burkville; • 102 MW combined-cycle Washington County Cogeneration plant located at Olin Chemicals in McIntosh; • 130 MW coal-biomass Gadsden Cogeneration plant located at Goodyear Tires and Rubber company; and • 250 MW combined-cycle cogeneration plant located at the Phenolchemie facility in Theodore. Both utility-owned and customer-owned generation facilities were certified by the Alabama Public Service Commission through a flexible regulatory process, which allows non-steam aspects of the CHP facilities to be included in the utility’s rate base. Alabama Power estimates that customer-owned generation has allowed it to avoid building 1.7 GW of central station capacity Alabama Power has officially released the RFP to acquire 500 MW of renewable energy and “environmentally specialized generating resources,” which they now define: An environmentally specialized generating resource would be a resource that promotes environmental or other efficiencies, such as combined heat and power. They’re accepting proposals for both “turnkey engineering, procurement, and construction agreements (EPC Agreements)” and “power purchase agreements” for new generation resources. Systems must be at least 5 MW and no larger than 80 MW. Responders have to submit a notice of intent by 10/14/16 and then full proposals are due 11/15/16, with selected projects ready to go into service in Should be pretty interesting to follow! Sources: NACAA 2015, SEE Action 2013, https://www4.eere.energy.gov/seeaction/publication/guide-successful-implementation-state-combined-heat-and-power-policies.
44 Examples show that well-designed policies effectively encourage CHP Overview of Key Points States are pursuing CHP to achieve system-wide benefits; SE has potential to do more Examples show that well-designed policies effectively encourage CHP More than one policy approach can maximize the benefits of CHP Exploring utility ownership of CHP in the Southeast is a path to achieve policy goals and encourage smart deployment.
45 Senior Research Analyst, IndustryThank you! Meegan Kelly Senior Research Analyst, Industry
46 Questions?
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