Apidays New York 2024 - The value of a flexible API Management solution for O...
Massachusetts policies for combined heat & power
1. 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
2. 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
3. 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
4. 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
5. 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
6. 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
7. 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
8. 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
9. 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.
10. 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
11. 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
12. 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
13. 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
14. 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
15. 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
16. 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
17. 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
18. 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