project start-up

If you answer “yes” to three or more of the following questions, your facility may be good candidate for CHP

• Do you pay more than $.08/ kWh on average for electricity (including generation, transmission and distribution)?
• Are you concerned about the impact of current or future energy costs on your business?
• Are you concerned about power reliability?
• Is there a substantial financial impact to your business if the power goes out for 1 hour? For 5 minutes?
• Does your facility operate for more than 5000 hours/ year?
• Do you have thermal loads throughout the year (including steam, hot water, chilled water, hot air, etc.)?
• Does your facility have an existing central plant?
• Do you expect to replace, upgrade or retrofit central plant equipment within the next 3-5 years?
• Do you anticipate a facility expansion or new construction project within the next 3-5 years?
• Have you already implemented energy efficiency measures and still have high energy costs?
• Are you interested in reducing your facility's impact on the environment?

If you answered "yes" to three or more of the above questions, proceed to a Level 1 Screening Analysis, for which we can provide free or low-cost support.

The first step in a Level 1 Screening Analysis is collecting data on your facility and its energy use. A walkthrough checklist can assist you. If all of the data requested in the walkthrough checklist is not readily available, a minimum of 12 months of electric and fuel bills as well as 12 months of steam use (where applicable) should be collected.  (Note that bills for both delivery service for gas and electric and the commodity should be obtained—two sets of bills for each utility service.)

The PRAC can help you to analyze the results of your data collection. A Level 1 Screening Analysis is a relatively quick analysis that is based on annual average costs, that uses estimated load profiles, and that uses other “rules of thumb” to estimate the project’s viability. The output normally includes savings, installed costs, and simple paybacks. The accuracy is usually within 30-50%.

If you would like to do the Level 1 Screening Analysis yourself, the following tool can help:

• RETScreen (Natural Resources Canada, free)
• BCHP Screening Tool (Oak Ridge National Lab, free)

Beyond these tools, the PRAC can provide free to low-cost project support.

If your analysis and research has indicated that your facility has potential, it is time to start getting to reality. A Level 2 Conceptual and Financial Screening helps you determine if CHP is a viable option not only technically (i.e. will it work) but also financially (i.e. is it worth it). It uses a detailed engineering and financial model or spreadsheet that preferably employs hourly load profiles (or at a minimum monthly load profiles and load duration curves).

A Level 2 Detailed Analysis involves:

• Electrical load profiling
• Thermal load profiling
• New utility rate structure analysis
• Unit sizing
• Thermal host determination (where to put the heat)
• Installation cost estimations
• Permitting impacts
• Utility interconnection requirements
• Financial calculations (simple payback, ROI, etc.)
• Financing option availability
• Analysis of different ownership structures with recommendations as to project structure
• Discussion of design/construction models

All of these facets are combined to create an hour-by-hour model of the output of a potential CHP system. The hourly fuel consumption, electrical output, useful thermal output, and  the value of that output can then be calculated. This resulting cost/savings information can then compared to what your facility would pay if the CHP system were not installed.

This analysis can be used to determine if investing in CHP will meet your facility’s long-term goals. Various financing options can be explored at this point to tailor the project to meet your goals.

The output of the Level 2 Conceptual and Financial Screening normally includes a detailed report on savings, installation costs, simple paybacks, cash flow, rates of return, and a conceptual one-line design including equipment sizing. Accuracy should generally be within 10-20%.

Although your facility may be able to perform all of these functions, it may be a good time to get a professional involved. Many engineering companies now have CHP/Energy Efficiency departments that could provide a Level 2 Conceptual and Financial Screening for a facility. However, all Clean Energy Application Centers can also provide these same screening services for free. ( Contact us to discuss your project.)

At this point, your facility has decided to go forward and it is time develop and design an actual CHP system. It is definitely time to call in a professional.

A professional design engineering firm will review the results of the Level 2 Screening and may do some measurement and verification before moving forward. They will then work with vendors to develop detailed design specs that can be used as a basis for an RFP.

They may also work with your facility in the design of the “balance-of-plant.” Balance-of-plant items are those items required to install the CHP unit, but that are not part of the CHP unit. They may include piping, stack breaching, platforms, electrical switchgear, steam piping, pumps, etc.

Additionally, if the local utility requires an interconnect study, the engineering company can work with them on the details. They may have personnel qualified to perform it or they will be able to recommend another firm.

If your project is very small and cannot support the added expense of an engineering firm’s involvement, it may be possible to use the results of the Level 2 Screening to get vendor bids.

In all cases, the PRAC can serve as a technical consultant. We can review specifications and bids, review equipment sizing and choices, and basically work as your on-staff expert in CHP.

Successfully installing a CHP system is a complex task that requires skill and knowledge in a wide range of disciplines including engineering, construction, plumbing, wiring and environmental to name a few.  For this reason it is wise to partner with contractor or project developer who has experience with CHP systems. It is likely that the engineering firm that assisted with your Level 3 analysis will be able to provide names of some qualified firms. If not, you can contact us for ideas.

Project Financing

A wide range of options is available for financing CHP projects, including a bank loan, leasing, partnership, joint venture, vendor financing, energy savings performance contract, utility program, end-use purchase (Chauffage), bonds, grants, enhanced leasing, and appropriations. The options should be fully investigated to see which one will provide the best solution for your business environment. Please see our Project Financing page for more details and explanations on each of these options.

Permitting

There will likely be a number of permits required to proceed with a CHP installation. The number and complexity will vary depending on the size and scope of the project. However, some of the more common ones include emissions, interconnection (connecting to the grid), and construction.

Emissions

CHP and other forms of recycled energy typically reduce total air emissions compared to grid-supplied power and separate onsite thermal systems. However, CHP systems are still required to meet environmental permitting requirements that regulate the emission of pollutants into the air. The emission depend on the technology used and the pollution abatement installed, and the requirements depend on the location of the system. See our Emissions page for details.

Interconnection

Most CHP system owners decide to still remain connected to the electric grid, so their building operations can go on uninterrupted during times of planned or unplanned maintenance eon the system, or so the grid can cover peak times.

The process of interconnecting to the grid varies from state from state (and sometimes from utility to utility). States and utilities want to ensure that the system is safely and reliably connected to the system so as to not cause damage to utility lines or personnel. Some states, though are improving and standardizing the process to make it easier for clean energy. In general, smaller or less complicated systems can receive a “fast track” approval from the utility, requiring a few days’ to a few weeks’ time, while larger or more complicated systems require longer studies before being connected.  

Operations and Maintenance

Once the system has been installed, interconnected, and commissioned, it has to be properly operated and maintained to maximize output and value. This can be done in a variety of ways, but will fall to a either in-house staff or contractors or a combination of both.

If you choose to use your own personnel, staffing levels and training should be investigated. Larger systems are likely to require additional staffing to run them and all systems will require operator training. Time should be budgeted to cover hiring and training of operations staff.

Maintenance of CHP systems can be very complex and require special skills. It is likely that all but the largest and most sophisticated of end users will have the personnel to provide anything but the basic maintenance required. Contractors will be needed for periodic maintenance and particularly for overhauls. Additionally these same maintenance contractors can be retained to provide all scheduled and unscheduled maintenance, thus reducing the demands on operational staff.