Ohio chp pilot a puco and u.s. doe partnership

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  • 1. March 4, 2013 NGA Policy Academy Cheryl Roberto, Former Commissioner Public Utilities Commission of Ohio Ohio CHP Pilot: A PUCO and US DOE Partnership
  • 2. Snapshot of Ohio CHP Potential Current Potential CHP Implementation in Ohio 530 MW 9,800 MW CHP % of Total Ohio Electric Generation 2% 29.4% Nationally, CHP % of Total Generation 8.0% - Market Sector Gen. Potential* (MW) Paper 2,329 Chemicals 2,838 Primary Metals 430 Food 310 Other Industrial 767 Commercial/Institutional 3,082 Total 9,800 CHP Technical Potential * Includes CHP export potential 2
  • 3. Why CHP matters to the PUCO PUCO’s  statutory  responsibilities: • Energy assurance and reliability • Addressing market deficiencies • Encouraging diversity of electricity supply • Ensuring emergency preparedness 3
  • 4. Why now? Clean Air Act’s Industrial Boiler MACT* • U.S. EPA finalized rules Dec. 20, 2012 • Establishes three-year compliance window** • Facility owners’ choices: – Add environmental controls/ retrofits to existing boilers – Replace oil/coal boilers with natural gas boilers – Consider installing new CHP as a natural gas option – Shut down/move Coal-Fired Plant Retirements • Localized grid constraints • Reduced capacity 4
  • 5. How CHP could help Ohio • Create distributed generation in pockets of electricity constraint • Provide “Island of Power” during outages: -- for sensitive/critical organizations including hospitals, data centers, others -- black start capabilities for everyone else • Eliminate or defer investment in “t” and “d” • Assist industries in developing cost-effective emission compliance strategies (Boiler MACT) • Expand customer choices to remain economically competitive (i.e. retaining businesses and jobs in Ohio) 5
  • 6. Boiler MACT Affected Boilers in Ohio Fuel Type Number of Units Capacity (MMBtu/hr) Coal 48 10,015 Heavy Liquid 6 743 Light Liquid 16 5,112 Biomass 7 1,448 Process Gas 6 2,003 Total 83 19,321 industrial, commercial and institutional boilers only Source: EPA Information Collection Request 6
  • 7. Potential Coal-fired Plant Replacement? ACEEE 12-state study (Fall 2012): • CHP can help replace generation lost to retired coal power plants. • The CHP technical potential in those 12 states alone is more than enough to offset all coal retirements nationwide.* * Study did not overlay specific locations of CHP technical potential with specific locations of retiring coal utility power. 7
  • 8. CHP can be cost-effective choice Costs for new 20 MW plants (ACEEE , September 2012) $- $0.02 $0.04 $0.06 $0.08 $0.10 Natural-Gas powered CHP Natural-gas powered combined cycle Nuclear power plant Levelized cost per KWh 8
  • 9. Genesis of PUCO/US DOE Partnership • September 2011: Ohio Gov. John Kasich hosts energy summit and expresses interest in promoting CHP for its economic and environmental benefits. • Winter 2011: U.S. DOE, through the Midwest Clean Energy Application Center, offers to pilot technical assistance to boiler operators in Ohio. • February 2012: PUCO adopts resolution in support of the DOE pilot and becomes the first state to participate. 9
  • 10. PUCO’s  Role  and  Commitment From PUCO resolution, February 2012: – Identify boilers in areas of potential constraint as priorities for U.S. DOE educational efforts – Work with PJM Interconnection to understand how new CHP could be incorporated into markets – Help boiler owners connect with U.S. DOE and utilities – Facilitate information sharing with other state agencies (OEPA, ODOD, ODNR) – Seek opportunities to remove educational and regulatory barriers to voluntary adoption of cost- effective CHP 10
  • 11. US  DOE’s  Role  and  Commitment Provide site-specific technical and cost information to facilities that are burning coal or oil in their boilers and are affected by EPA Boiler MACT Rules. • 40+ major source facilities (~ 90 to 100 boilers) in Ohio • Share information on financial incentives available at the local, state, utility and federal levels as well as private financing 11
  • 12. Removing Educational Barriers CHP 101 Workshop (3/9/12): • Target Audience – MACT boiler owners • DOE Technical Assistance Program • Ohio EPA on MACT rule • Examples of successful CHP in Ohio • PJM market overview • DR opportunities in PJM 12
  • 13. Removing Educational Barriers CHP Case Studies Workshop (6/20/12): • Target Audience – MACT boiler owners • CHP 101 • Two Medical Centers • Wastewater Treatment Plant • Landfill • Coke Plant • Chemical Plant 13
  • 14. Removing Educational Barriers Financial Tools Workshop (8/2/12): • Target Audience – MACT boiler owners • Federal and State tax policies • State Financing Program • Fuel Procurement Hedging • Debt, Developer, Equity Financing • EPA Spark Spread Tool • Project Cost Screening Tool 14
  • 15. Removing Educational Barriers Training Natural Gas Utility Key Account Reps (12/7/12): • Target Audience – Gas Utility Key Account Reps • Understanding Fundamentals of CHP • Why CHP Can Bring Value to Your Customers • Recognizing CHP opportunities in Your Customers’  Facilities • Finding Assistance For Your Customer Once CHP Potential is Identified 15
  • 16. Removing Regulatory Barriers Stand-by Rates Workshop (9/13/12): • Target Audience – MACT boiler owners, developers, utilities, all stakeholders • Introduction to Stand-by Rates • Existing Stand-by Rates in Ohio (RAP) • Best Regulatory Practices (NRRI) 16
  • 17. Removing Regulatory Barriers PUCO Rulemakings and Comment Opportunities: • Target Audience – MACT boiler owners, developers, utilities, all stakeholders • Interconnection, Case No. 12-2051-EL-ORD • Net Metering, Standard Market-Based Rate for Energy and Capacity for Co-Gen, Case No. 12- 2050-EL-ORD 17
  • 18. Results: Outreach & Education 385 people attended 5 CHP workshops at PUCO 405 people joined the PUCO listserv on CHP 3,500 unique page views of our CHP web page for: -- Archived workshop webcasts -- Existing and potential CHP facilities in Ohio -- CHP rulemakings and tariffs -- Technical assistance and reports 18
  • 19. • Over 50 companies contacted • 12 feel they are already in compliance • 6 no longer in business • Analyses for 15 in various stages • All companies are now aware of how CHP can assist in a compliance strategy • U.S. DOE will continue to track results of technical assistance Results: Boiler MACT Technical Assistance 20
  • 20. Ohio’s  Legislative  Support  of  CHP Senate Bill 315, Gov. Kasich signed June 2012: • CHP and waste energy recovery can be counted toward  the  state’s  Energy Efficiency requirements. • Waste energy recovery facilities qualify as renewable energy sources under Ohio’s  Alternative  Energy  Portfolio  standard. 20
  • 21. What did we learn? Successful CHP applications operate in Ohio University of Cincinnati Central Utility Plant 21
  • 22. What did we learn? Pay-back horizons are best suited to institutional or governmental boiler operators. Joint ventures work for private industry. Ashtabula, Ohio joint venture: Millenium Inorganic Chemicals and Duke Energy Generation Services 22
  • 23. What did we learn? • Financing is project specific and owners often use consultants to pursue best options • Standby tariffs must be updated to reflect current conditions 23
  • 24. What’s  ahead  for  CHP  in  Ohio • Market-specific newsletters created by Midwest CEAC and PUCO • Rules updates • Midwest CEAC implementation assistance when an owner chooses a CHP solution • Additional training opportunities as topics and interests develop • Open invitation from U.S. DOE for additional ways they can assist PUCO 24
  • 25. For More Information Public Utilities Commission of Ohio: Matt Butler, Administrative Officer matthew.butler@puc.state.oh.us 614-644-7670 CHP@puc.state.oh.us http://www.puco.ohio.gov/puco/index.cfm/industry-information/industry- topics/combined-heat-and-power-in-ohio/ Midwest Clean Energy Application Center: John Cuttica, Director, Energy Resource Center cuttica@uic.edu 312-996-4382 http://www.midwestcleanenergycenter.org/ 25
  • 26. For More Information U.S. Department of Energy Katrina Pielli, Senior Policy Advisor, Acting CHP Deployment Lead katrina.pielli@ee.doe.gov 202-287-5850 Boiler MACT Technical Assistance Program http://www1.eere.energy.gov/manufacturing/distributedenergy/boilermact.html 26
  • 27. References • “Coal  Retirements  an  the  CHP  Investment  Opportunity,”    Anna  Chittum  and  Terry  Sullivan,   American Council for an Energy-Efficient Economy, September 2012 http://www.aceee.org/research-report/ie123 • “FACT SHEET: Adjustments for Major and Area Source Boilers and Certain Incinerators,”  U.S.   EPA, December 2012 http://www.epa.gov/airquality/combustion/docs/20121221_sum_overview_boiler_ciswi_fs.pdf • “President  Obama Signs Executive Order Promoting Industrial Energy Efficiency,”  The  White   House, August 2012 http://www.whitehouse.gov/the-press-office/2012/08/30/executive-order- accelerating-investment-industrial-energy-efficiency • “Natural  Gas Key Account Reps Training for Combined Heat and Power,”  John Cuttica and Cliff Haefke, Midwest Clean Energy Application Center, December 2012 • “Annual  Energy Outlook 2013 Early Release Overview,”  U.S.  Energy  Information   Administration, December 2012 http://www.eia.gov/forecasts/aeo/er/pdf/0383er(2013).pdf 27