Northeast Combined Heat and Power Road Mapping Workshop

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Northeast Combined Heat and PowerRoad Mapping
Workshop March 30, 2004
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CHP in the Northeast Building on Success
97 GW of CHP by 2009
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NECHPI Mission Statement

• To lead the Region in encouraging the
  implementation of CHP technologies
• To drive CHP roadmap action items for the
  Northeast Region in support of DOEs and EPAs
  goal of doubling CHP use by 2010
• To provide for coordination and communication
  among the various stakeholder organizations in
  the region, including federal agencies, state
  agencies, utilities, project developers,
  equipment manufacturers, CHP users, universities,
  research institutions, and public interest
  groups.

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Northeast Application Center Mission Statement

• To provide application assistance, technology
  information, and educational support necessary
  to
• Reduce perceived risks by
• Architects and engineering companies
• Energy services companies
• Building owners
• Foster these systems as a viable
• Technical option
• Financial option
• Environmental option
• Energy efficiency option

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Special Thanks

• For support of the NECHPI and the NAC
• Massachusetts Technology Collaborative
• U.S. DOE
• NYSERDA
• UMass Amherst
• Pace University Energy Project
• Gas Technology Institute

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Special Thanks

• For support of the NE Road Mapping Workshop
• Massachusetts Technology Collaborative
• U.S. DOE
• U.S. EPA
• Energetics
• Organizing Committee
• Reception sponsors

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NE CHP Initiative and Application Center A Bit
of Background

• Suzanne Watson
• Northeast States for Coordinated Air Use
  Management (NESCAUM)
• March 30th, 2004

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Began with DOEs challenge to double CHP by
2010

• Challenge issued Dec., 1998
• Visioning Workshop held June, 1999
• Compact signing between CHP industry and DOE
  happened in Feb., 2000
• Creation of USCHPA a private industry
  collaborative
• First annual national CHP roadmap workshop held
  in Oct., 2000 in Baltimore 5th one scheduled
  for Sept. 20th 21st in Austin, Texas
• Creation of CHP/DG specific resource programs at
  EPA and DOE

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Regional/State Efforts

• 18 regional and state level workshops held from
  1999 2001 across the US
• 2nd annual national CHP workshop held in Oct.,
  2001
• Action item that came from this workshop was
  recognition of the need for more regionally
  focused work
• DOE funded a CHP application center in MW at
  the University of Illinois in addition a small
  working group formed a MW CHP Initiative to
  address CHP policy and regulatory-related issues
  in addition to technology-related ones
• There are now seven regional CHP initiatives
  established across the US

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NE CHP Initiative

• Began with two CHP workshops both held in 2000
  one in New England (ME, NH, MA, and VT) and one
  including NY, NJ, PA, and CT. Work plans for both
  at uschpa.org
• Official kick off meeting of the NE Initiative
  held Spring of 2002 in Westborough, MA.
• Sponsored by Boston DOE Regional Office
• Regular meetings held every other month after
  that with growing attendance at each one
• Development of a NE regional web site found at
  northeastchp.org
• Recently awarded funding to establish the NE CHP
  Application Center.

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Roadmap Actions for NE CHP Initiative Include

• 1. Develop CHP Markets and Applications
• 2. Eliminate Regulatory and institutional
  Barriers
• 3. Raise CHP Awareness
• 4. Facilitate and Coordinate State and Federal
  Legislative Activities
• 5. Implementation and Reporting

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US CHP Policy Day

• May 10th 12th in Washington DC at Hotel
  Washington
• Legislative and Regulatory Updates Hill visits
  and Hill reception with Congressional Members
  CHP Champion Awards
• WADE and EPA CHP Partners Meetings
• Registration and agenda found at uschpa.org

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Resources

• NE CHPI northeastchp.org
• USCHPA uschpa.org
• DOE eere.energy.gov/de/
• EPA epa.gov/chp/
• NE CHP Application Center University of
  Massachusetts Amherst, Pace University and
  NYSERDA Partnership

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An Update on the Northeast Regional CHP
Application Center

• Lawrence Ambs, University of Massachusetts
  Amherst
• Fred Zalcman, Pace University

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Mission
Accelerate the market penetration of energy
efficient and environmentally superior CHP in
order to improve the environment, raise
productivity in buildings and industry, lower
regional energy costs, strengthen energy
security, enhance consumer choice and reduce
price risks for end-users.
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Northeast Application CenterWorking Together in
the Northeast
US Department of Energy Distributed Energy
Resources
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Pacific Southwest
Intermountain
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Goals

• Establish a One-Stop Technology and Policy
  Clearinghouse
• Promote Standardized and Easily Replicable CHP
  Solutions Within Target Markets
• Guide Market Participants To Select Projects that
  will Improve the Technical, Economic and
  Environmental Performance of CHP

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Goals

• Create Central Repository of CHP Operating
  History and Validated Performance Metrics to
  Educate Customers and Inform Policymakers
• Educate Policymakers so that they can Formulate
  Solutions to Overcome Market and Regulatory
  Barriers to Accelerate CHP Penetration
• Promote Opportunities for Grid Connected CHP
  Systems that meet Load Response and Program
  Objectives

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State Priority Areas

• Agricultural Applications
• Commercial High-Rise
• Institutional
• Biomass/biofuels CHP
• Landfill Methane
• Lumber and Wood Products
• Fuel Cell CHP
• District Energy
• Food processing

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Targeted Activities

• Market research
• Education and outreach
• Application assistance
• Interface with national programs and initiatives

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Education and Outreach

• Host website
• Conduct training workshops
• Organize major regional CHP conference
• Provide regulatory assistance
• Foster regional CHP coalitions and partnerships

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Identification and Facilitation of High Impact
Projects

• Provide technical assistance to facility owners,
  equipment manufacturers, architects, engineers
  and others
• Screen Projects to determine the most suitable
  technology for a given application
• Identify process changes and load shaping
  opportunities that could expand deployment of CHP
  in industrial and building settings
• Develop CHP Best Practices

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CHP Best Practices

• Case studies - provide concrete evidence of CHP
  successes within various target market segments
• Best practice packages promote standardized and
  easily replicable CHP solutions within target
  markets
• Installations Database to track CHP
  achievements and to develop strategies and
  procedures for penetrating target market segments

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Contacts

• Tom Bourgeois
• NAC Co-Director for Education and Outreach
• [phone] (voice)
• tbourgeois_at_law.pace.edu
•    
• Beka Kosanovic
• NAC Co-Director for Technical Assistance
• [phone] (voice)
• kosanovi_at_ecs.umass.edu

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National Goal 97 GW of CHP by 2010
Source Energy and Environmental Analysis,
Washington DC
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Progress to Date
Source Energy and Environmental Analysis,
Washington DC
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Of this total, 20,700 MW is controlled by
unregulated, industrial players
Note this dataset excludes all generators
owned/controlled by SIC code 22, which includes
both regulated and unregulated gas, electric and
steam utilities. Data shown is known to be an
undercount, but not known to what degree.
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and 1,397 MW are controlled by commercial and
institutional entities.
Note this dataset excludes all generators
owned/controlled by SIC code 22, which includes
both regulated and unregulated gas, electric and
steam utilities. Data shown is known to be an
undercount, but not known to what degree.
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The majority of these non-utility installations
are lt1,500 kW.
Median Generator 1,350 kW
Note this dataset excludes all generators
owned/controlled by SIC code 22, which includes
both regulated and unregulated gas, electric and
steam utilities. Data shown is known to be an
undercount, but not known to what degree.
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MW distribution of Northeast CHP, by industry
Label is of total US MW by industry
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Unit distribution of Northeast CHP, by industry
Label is of total US installations by industry
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Concluding facts about Northeast CHP population

• CHP in the northeast tends to be smaller and more
  numerous than the national average
• 6.3 of the known non-utility CHP MW are in the
  northeast, but this comprises 19 of the known
  installations.
• Driven largely by NY State
• The Northeast has more experience connecting
  non-utility CHP to the grid than central power
  plants
• 185 central power plants in the NE, 341 end-user
  sited CHP plants (526 total plants, incl.
  utility-owned)
• The reliability of the Northeast power grid is
  dependent on CHP
• 14 of the total power consumed in the NE is
  generated in CHP plants.
• The reliability of the Northeast power grid is
  dependent on the actions of unregulated,
  decentralized market participants
• Non-utility owned CHP contributes 1,400 MW of
  power generation to the northeast power system
  (22,000 MW nationwide)

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Northeast Regional CHP Roadmap
WorkshopNorthampton, MAMarch 30,
2004Regulatory PoliciesTim
Danielstwdaniels44_at_hotmail.com202-905-95226
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Critical Areas for Action

• Distribution Rates
• Electric (standby, backup)
• Gas (DG, interruptible)
• Steam (district heating)
• Environmental
• Emissions Permitting
• Credit Allocations (NOx, SO2, GHGs)

• Siting
• Interconnection (electric, gas)
• Permitting (fire, construction, etc)
• Resource Planning
• Utility (distribution)
• ISO/RTO (transmission)

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Critical Areas for Action

• Direct Incentives
• Direct Payments (system benefits fund)
• Low Interest Financing
• Tax (sales exemption, investment credit,
  production credit, depreciation rate)
• Technical Assistance

• Indirect Incentives
• Aligning Utility Incentives (performance-based
  ROR)
• Political Support
• Wholesale Markets
• Capacity
• Demand Response
• Other

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Recent Actions in Northeast
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Four Basic Questions

• How do we create market rules to reflect an
  equitable balance of the societal costs and
  benefits of CHP?
• How do we promote open and transparent markets
  such that end-users are made aware of (temporal,
  locational, environmental) price signals that
  enable them to become informed and engaged market
  participants?
• The economists public policy question In
  regulated (imperfect) markets, how do we best
  align incentives for market participants with the
  goals of society?
• How do we change the anachronistic mind-sets of
  market regulators and participants to match
  todays technologies and societal needs?

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Air Permitting Regulation for Smaller-Sized
GeneratorsTom BourgeoisDirector of
ResearchPace Univ. Energy Project
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Policy Issues

• OBJECTIVE How can the air permitting process
  be streamlined in a manner that
• protects the integrity and rigor of the process,
  
• and
• (b) minimizes additional transaction costs and
  time burdens for small projects

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Existing Small Generator RulemakingsRAP MODEL
RULE Stakeholder Process Sponsored by U.S. DOE
and Coordinated by the Regulatory Assistance
Project (RAP) MODEL REGULATIONS FOR THE OUTPUT OF
SPECIFIED AIR EMISSIONS FROM SMALLER SCALE
ELECTRIC GENERATION RESOURCES. October 31,
2002Texas Commission on Environmental Quality
(former TNRCC). Air Quality Standard Permit for
Electric Generating Units . June 2001
California Distributed Generation Certification
ProgramEffective October 2002
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(No Transcript)
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Y
Y
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WHY THESE PRINCIPLES MATTER

• Output Based Air Permitting Systems Reward
  Efficiency
• The need to appropriately credit CHP for
  displaced thermal requirements at the site.
• Protocols in air permitting flow over to other
  programs such as Emissions Reduction Credits
• Pre-Certification reduces costs and time duration
  for siting projects and for capturing emissions
  credits and allowances.

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Example of Equipment Pre-Certification State
of CaliforniaAIR RESOURCES BOARD (CARB)
Executive Order DG-004Distributed Generation
Certification ofIngersoll-Rand Energy
Systems70LM PowerWorks Microturbine
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Key Criteria for Recent Proposed DG Air
Regulations
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CAPTURING ECONOMIC VALUE FROM EMISSION REDUCTIONS

• Emission Reduction Credits
• (All Northeast States)
• NOX Emission Allowances from State NOX Budget
  Programs (MA, NY)

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EMISSION REDUCTION CREDITS (ERCs)

• Longstanding EPA and DEP principles require that
  ERCs must meet the following requirements
• Real
• Quantifiable
• Surplus
• Permanent
• Enforceable

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The 6 Key Steps for Creating ERCs

• 1. Select a representative baseline period
• 2. Compute prior actual annual emissions
• 3. Compute prior allowable annual emissions
• 4. Take the lesser of actual or allowable
• 5. Compute future maximum annual potential
• 6. Subtract line 5 from line 4 to obtain ERCs