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Massachusetts policies for combined heat & power
 

Massachusetts policies for combined heat & power

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    Massachusetts policies for combined heat & power Massachusetts policies for combined heat & power Presentation Transcript

    • Creating A Greener Energy Future For the Commonwealth Massachusetts Policies for Combined Heat & Power (CHP) Alternative Portfolio Standard and the Energy Efficiency Rebates Dwayne Breger, Ph.D. Director, Renewable Energy Division NGA Policy Academy Second Convening: Enhancing Industry through Energy Efficiency & Combined Heat & Power Sofitel Hotel, Philadelphia March 5, 2013
    • Creating A Greener Energy Future For the Commonwealth Overview of MA Policies for CHP MASS SAVE – Utility Energy Efficiency Program Alternative Energy Portfolio Standard (APS) MASS SAVE – Utility Energy Efficiency Program • All cost-effective EE is mandated by Green Communities Act of 2008 funded through a System Benefit Charge on electric ratepayers, as well as contributions of RGGI auction funds, with lost revenues captured through de-coupling. • CHP is included as Energy Efficiency measure, if it can pass a B/C test • Provides rebates of up to $750/kW, and 50% cost of feasibility studies. Alternative Energy Portfolio Standard (APS) • Operates  in  conjunction  with  state’s  Renewable  Energy  Portfolio  Standard  (RPS)   programs (Class I, Solar Carve-Out, Class II Existing, Class II Waste Energy) • Creates obligation of all retail electricity suppliers to acquire Alternative Energy Certificates (AECs) equal to a set percentage (of load served. • APS supports non-RE technologies (flywheels, gasification, CHP). CHP of key importance – AECs are provided for efficiency gains in electric and thermal production. 2
    • Creating A Greener Energy Future For the Commonwealth MASS SAVE Energy Efficiency Program for CHP Incentive Structure • Green Communities Act of 2008 recognizes CHP projects as an Energy Efficiency Measure eligible for Incentive Funding by Utilities. • Rebate Incentive Structure – Small systems (<150 kW): $750/kW – Larger  systems  (≥150  kW): up to $750/kW • Incentive value determined on case-by-case basis considering value  of  CHP  in  utility’s  overall  EE  portfolio,  overall  building   efficiency, B/C ratio, project risk, and customer investment threshold. • Rebate limited to no more than 50% of installed cost. 3
    • Creating A Greener Energy Future For the Commonwealth MASS SAVE Energy Efficiency Program for CHP Benefit/Cost Ratio Test • B/C Ratio (BCR) Test considers project and electric system value of CHP project – Project Specs: kW, kWh, fuel use, fuel savings – Timing: Winter/Summer and Peak vs. Off-peak – Costs: Wholesale electric and fuel costs, installed cost, maintenance costs, federal 10% ITC incentive can reduce costs • Only high efficiency CHP units likely to demonstrate threshold BCR > 1. Characterized by: – Significant run hours – High thermal use – appropriate sizing to thermal load – Low installed costs – Reduction in peak electric load demand from grid • Detailed hourly analysis is essential to determine financial benefit to customer and BCR. 4
    • Creating A Greener Energy Future For the Commonwealth MASS SAVE Energy Efficiency Program for CHP Recent Outcomes • For projects awarded – BCRs range between 1 and 2. • For 2011: – CHP has represented 30% of Commercial/Industrial EE Target Savings – $/kWh savings have been the lowest of all MASS SAVE measures. Link to Guide for the MASS SAVE CHP Incentive Program http://www.masssave.com/business/building-or-equipment-upgrades/find- incentives/~/media/Files/Business/Applications%20and%20Rebate%20Forms/CHP%20Ince ntive%20Guidebook%20-%20dated%2011-18-10.ashx 5
    • Creating A Greener Energy Future For the Commonwealth Alternative Energy Portfolio Standard • Established under Green Communities Act 2008. Provides for RPS-type program for alternative (non-renewable) technologies. – Operates  in  conjunction  with  state’s  Renewable  Energy  Portfolio   Standard (RPS) programs (Class I, Solar Carve-Out, Class II Existing, Class II Waste Energy) • Program administered under DOER APS Regulation 225 CMR 16.00. • Creates obligation of all retail electricity suppliers to acquire Alternative Energy Certificates (AECs) equal to a set percentage of load served. • Program compliance obligation began in 2009. • Minimum Standard increases to 5% by 2020. 6
    • Creating A Greener Energy Future For the Commonwealth Alternative Energy Portfolio Standard (continued) • Eligible technologies include flywheels, CHP, gasification with carbon capture/sequestration, paper-derived fuels. • Qualified units produce Alternative Energy Credits (AECs). • Nearly 100% of AECs generated are from CHP units. • Alternative Compliance Payment (ACP) Rate is $20/MWh (2010) and increases with CPI. Provides AEC price ceiling price. 7
    • Creating A Greener Energy Future For the Commonwealth AECs for CHP Account for Primary Fuel Savings 8 Grid Boiler CHPECHP_in Eelec Alternative Energy Credits (AECs) calculated as primary energy savings compared with grid power and separate thermal unit, to meet the same load. AECs = Eelec/0.33 + Etherm/0.80 - ECHP_in Etherm Eelec / effelec Etherm / efftherm Eelec Etherm Without CHP With CHP all energy expressed in MWh Load Load
    • Creating A Greener Energy Future For the Commonwealth MA Alternative Portfolio Standard – Minimum Standard and Cumulative CHP Demand Year APS Minimum Standard Est. MW of Installed CHP 2009 1.00% 2010 1.50% 64 2011 2.00% 92 2012 2.50% 121 2013 3.00% 148 2014 3.50% 177 2015 3.75% 205 2016 4.00% 215 2017 4.25% 226 2018 4.50% 237 2019 4.75% 249 2020 5.00% 261 Estimate based upon APS being met only by CHP Approximately 27 MW of new CHP installations required each year through 2014, and half this amount in years following.
    • Creating A Greener Energy Future For the Commonwealth Guidelines for APS Eligible CHP Systems • Metering is required to demonstrate useful thermal and power output. Metered data subject to independent verifier. Metering requirements relaxed for small systems. – APS Guideline includes detailed discussion of metering (see: http://www.mass.gov/eea/docs/doer/rps-aps/aps-chp-guidelines- jun14-2011.pdf). • Program supports incremental CHP – Provides incentive for existing electric-only power plants to add useful thermal load, or for thermal-only plants to add electric generation. • CHP Projects must serve thermal load in MA • CHP Units may also qualify for Utility MassSAVE Funding 10
    • Creating A Greener Energy Future For the Commonwealth APS Benefit – AEC Estimating Tool (Example) Electric GenerationEFF AECs/hr $/hr Maximum Equivalent FullLoad Run hrs/year AECs/yr MaximumAnnual ValueforAECs ($/year) kW MWh/yr MMBTU/yr MWh/yr MMBTU/yr MWh/yr 500 3500 15203 4455 36198 10606 15.91$ 7000 5568 111,363.64$ UnitElectricGenerating Capacity UnitUsefulHeatGenerating Capacity FueltoCHP(mWh) 0.33 0.80 Useful Heat asa%of Total Heat Output CHP Overall Efficiency@Full Load Value per AEC(from pull downlist below) Annual Value forAECs ($/year) 42% 0.75 17.00$ 94,659.09$ CHP genset MWh elec/yr 3500 Meter (Typ) MWh/yr Fuel 10606 to heat dump Useful Heat MWH/yr 4455 500 kW CHP operating at 75% Overall Efficiency and 7000 run-hours, can annually generate 5568 AECs and estimated revenue of $94,660. Link to downloadable Estimating Tool: http://www.mass.gov/eea/docs/doer/rps/estimating-tool- for-aps-aecs-from-generic-basic-genset-based-chp- unit.xls
    • Creating A Greener Energy Future For the Commonwealth APS Program Status Operating APS CHP by End Use (Approved or Under Review) 12 32MW, 52% 3.6MW, 6% 8.2MW, 13% 18MW, 38% Academic Manufacturing Hospital Other Total Capacity = 61.7 MW
    • Creating A Greener Energy Future For the Commonwealth EE/APS Project Support – Case Study 1 UMass Medical Center Campus Project Description New 7.5 MW combustion gas turbine and HRSG integrated with existing 9 MW power boiler steam turbines. Total gross generating capacity is 16.5 MW. Campus Loads Electric, Steam (Heating , Chilled water with steam and electric motor driven compressors) Projected Performance Most of incremental energy will be electrical which will allow the Campus to operate with virtually no requirement for supplemental grid power. No incremental heating load and related steam production. Largest benefit is the increase in overall efficiency of the new 16.5 MW system, which is 86% compared with the previous 9 MW system efficiency of 71%. 13
    • Creating A Greener Energy Future For the Commonwealth EE/APS Project Support – Case Study 1 UMass Medical Center Campus Projected Performance (per annum) Total Net Electricity: 123,566 MWh Incremental Net Electricity: 85,404 MWh Total Steam: 823,339 MMBTU Incremental Steam: None Incremental Net Fuel Use: -33,785 MMBTU Incremental Net GHG Emission Reduction: 18,571 TPY (19%) Incentives EE MassSave Award $5.6 million Alternative Portfolio Standard Projected annual AECs = 135,488 Value at present market value of $20/AEC = $ 2,709,768 per annum Value per incremental kWh = 3.7 cents 14
    • Creating A Greener Energy Future For the Commonwealth EE/APS Project Support – Case Study 1 Simonds International Project Description Saw Blade manufacturer; Fitchburg, MA; ~160 employees New 1.8 MW (3 x 600 kW) natural gas fired diesel gensets, with 400 ton absorption chiller. Plant Loads Electric motors and drives; Space heating and DHW; Chilled water for space and process cooling. 15
    • Creating A Greener Energy Future For the Commonwealth EE/APS Project Support – Case Study 1 Simonds International Projected Performance (per annum) Electric Generation: 15,019 MWh Useful Thermal Energy: 63,735 MMBTU Fuel Use: 135,550 MMBTU Net GHG Emission Reduction: 2,956 TPY (27%) Incentives EE MassSave Award $470,000 Alternative Portfolio Standard Projected annual AECs = 29,768 Value at present market value of $20/AEC = $ 595,360 per annum Value per incremental kWh = 4 cents 16
    • Creating A Greener Energy Future For the Commonwealth Other Resources and Activities Additional CHP Resources in MA/Northeast • U.S. DOE, Northeast Clean Energy Application Center – UMass, Amherst and Pace University – Provides policy support and technical information and early stage project evaluations • CERP (Clean Energy Resource Program): MassDEP-DOER Partnership supports CHP and other technologies for MassDEP regulated entities (boilers, landfills, water, waste/organics). • International District Energy Association Related Activities in MA • DG Interconnection Tariff revision • Renewable Thermal Pilot and Policy • District Energy 17
    • Creating A Greener Energy Future For the Commonwealth Dwayne Breger Director, Renewables Division 617-626-7327 dwayne.breger@state.ma.us John Ballam Engineering Manager 617-626-1070 john.ballam@state.ma.us DOER CONTACT INFO Resources at the MA DOER APS Website www.mass.gov/energy/aps APS Regulation 225 CMR 16.00 Statement of Qualification Application Standards for APS meters Tools for estimating AECs generated for your project