Massachusetts Policies for Combined Heat & Power (CHP) Alternative Portfolio Standard and the Energy Efficiency Rebates

Transcription

1 Massachusetts Policies for Combined Heat & Power (CHP) NGA Policy Academy Second Convening: Enhancing Industry through Energy Efficiency & Combined Heat & Power Sofitel Hotel, Philadelphia Alternative Portfolio Standard and the Energy Efficiency Rebates Dwayne Breger, Ph.D. Director, Renewable Energy Division March 5, 2013

2 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 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 MASS SAVE Energy Efficiency Program for CHP 4 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.

5 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 ntive%20guidebook%20-%20dated% ashx 5

6 Alternative Energy Portfolio Standard Established under Green Communities Act 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 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 Minimum Standard increases to 5% by

7 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 AECs for CHP Account for Primary Fuel Savings E elec / eff elec E therm / eff therm Grid Boiler E elec E therm Load Without CHP E CHP_in CHP E elec Load With CHP E therm Alternative Energy Credits (AECs) calculated as primary energy savings compared with grid power and separate thermal unit, to meet the same load. AECs = E elec / E therm / E CHP_in all energy expressed in MWh 8

9 MA Alternative Portfolio Standard Minimum Standard and Cumulative CHP Demand Year APS Minimum Standard Est. MW of Installed CHP % % % % % % % % % % % % 261 Approximately 27 MW of new CHP installations required each year through 2014, and half this amount in years following. Estimate based upon APS being met only by CHP

10 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: 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 APS Benefit AEC Estimating Tool (Example) Unit Electric Generating Capacity Unit Useful Heat Generating Capacity Electric Generation EFF Fuel to CHP (mwh) AECs/hr $/hr Maximum Equivalent Full Load Run hrs/year AECs/yr Maximum Annual Value for AECs ($/year) kw MWh/yr MMBTU/yr MWh/yr MMBTU/yr MWh/yr $ $ 111, Useful Heat as a % of Total Heat Output CHP Overall Load Value per AEC (from pull down list below) Annual Value for AECs ($/year) 42% 0.75 $ $ 94, MWh elec/yr 3500 to heat dump 500 kw CHP operating at 75% Overall Efficiency and 7000 run-hours, can annually generate 5568 AECs and estimated revenue of $94,660. Meter (Typ CHP genset Useful Heat MWH/yr 4455 Link to downloadable Estimating Tool: MWh/yr Fuel 10606

12 APS Program Status Operating APS CHP by End Use (Approved or Under Review) 3.6MW, 6% Total Capacity = 61.7 MW 8.2MW, 13% 18MW, 38% 32MW, 52% Academic Manufacturing Hospital Other 12

13 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 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 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 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 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 Resources at the MA DOER APS Website APS Regulation 225 CMR Statement of Qualification Application Standards for APS meters Tools for estimating AECs generated for your project DOER CONTACT INFO Dwayne Breger Director, Renewables Division John Ballam Engineering Manager