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

Transcription

1 Massachusetts Policies for Combined Heat & Power (CHP) Center for Clean Air Policy Climate Policy Initiative Dialogue October 18-19, 2012 Washington, DC Alternative Portfolio Standard and the Energy Efficiency Rebates Dwayne Breger, Ph.D. Director, Renewable Energy Division

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 Benefit/Cost Ratio Test B/C Ratio (BCR) Test considers societal 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 MASS SAVE Energy Efficiency Program for CHP Recent Outcomes Results to date for BCRs range between 1 and 2. Realization rates have been good. $/kwh savings have been among the lowest of all MASSSAVEmeasures. CHP kwh savings have accounted for > 9% of total C&I program savings over last three years. Link to Guide for the MASSSAVECHP 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 MassSAVEUtility EE 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 42% Value per Annual Value AEC (from for AECs pull down list ($/year) below) $ $ 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 Other Resources and Activities 13 Additional CHP Resources in Northeast Northeast Clean Heat and Power Initiative Membership advocacy organization U.S. DOE, Northeast Clean Energy Application Center UMass, Amherst and Pace University Provide technical information and early stage project evaluations International District Energy Association Related Activities in MA DG Interconnection Tariff revision Renewable Thermal Pilot and Policy District Energy

14 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