Why Promote CHP?

1
Why Promote CHP?

• Focus on cogenerating electricity and thermal
  energy on-site
• CHP uses thermal energy from heat normally wasted
  in electricity generation
• Result energy and environmental benefits
• Also, potential reliability benefits
• But cost and maintenance issues must be addressed

2
Factors to Consider

• Utility rates
• Interconnection standards, fees, processes
• Environmental regulations
• Applicable taxes
• Price forecasts for alternative fuels
• Familiarity of facility managers with existing
  emerging CHP technology
• Incentives to reduce capital cost

3
Possible Incentives

• Education capacity building
• Technical assistance re scoping studies
• Project financing
• Project incentives
• Tax credits

4
CHP Utility Rates

• Gas utility promotional rates for gas
• must apply for off-tariff rate, with
  justification
• Electric utility favorable backup/standby power
  rates
• as discussed

5
Regional CHP Initiative

• Northeast CHP Application Center was established
  Oct 2003 for US DOE at UMass Amherst and Pace
  Univ.
• Partnership between UMass, Pace, NYSERDA, MA
  Division of Energy Resources and the Maine State
  Energy Office
• To provide application assistance, technology
  information, and educational support in the six
  New England states and New York.

6
CHP Incentives, continued

• Source of Incentives
• Gas utility ratepayers
• Electric utility ratepayers
• Taxpayers
• OTHER?
• Delivery of Incentives
• State agency
• Gas utility
• Electric utility
• OTHER?

7
Example Program -- MA

• Massachusetts gas utilities
• Technical assistance
• eg Bay State Gas, 50 of cost for engineer for
  scoping study, up to 7500
• Plus existing DSM incentives only
• eg incentive for more efficient boiler
• Above are permitted within gas DSM despite
  load-building effect

8
Example Program -- NJ

• Office of Clean Energy CHP incentives
• CHP system must be at least 60 efficient
• Add-on generation capability -- 0.50/W, up to
  30 of project cost
• New microturbine/ICE/gas turbine based -- 1/W,
  up to 30 of project cost
• W. space cooling, up to 40 of project cost
• Fuel cell based -- 2.50/W, up to 40 of cost