Distributed Generation - Combined Heat and Power (DG-CHP)

1. Gunnar Walmet New York State Energy Research and Development Authority Albany, New York Distributed Generation - Combined Heat and Power (DG-CHP) Connecticut’s Energy Future

2. A Public Benefit Corp established in 1975 by State Legislature Mission: To identify solutions to State’s energy challenges in ways that benefit the State’s economy and environment Forge public/private partnerships with businesses, municipalities, residents, and other energy stakeholders to accomplish this goal. New York State Energy Research and Development Authority (NYSERDA)

3. Energy Research, Development, and Demonstration System Benefits Charge Administrator Energy Planning & Analysis Power Plant Siting Board Member Greenhouse Gas Task Force West Valley Demonstration Project Spearheading EO # 111 And Now Administrator of Renewable Portfolio Standard (RPS) NYSERDA Responsibilities

4. Public Service Commission established System Benefits Charge in 1998 to ensure energy R&D and energy efficiency service were maintained during transition to competition. Named NYSERDA as administrator of programs NYSERDA administers programs under New York Energy $martSM umbrella Provides services to commercial, industrial, institutional, municipal, and residential customers with emphasis on low-income consumers Focus on supporting market-based efforts to remove barriers to energy efficiency and renewable energy New York’s Energy $mart (SBC) Program

5. NY SBC Program Budget Allocation ($787 Million thru June 2006)

6. Technical Assistance Program Peak-Load Demand Reduction Program New Construction Program Smart Equipment Choices New York Energy $martSM Loan Fund Commercial/Industrial Performance (CIPP) Energy Efficiency Services

7. Res Tech Technical Assistance Energy Star Labeled Homes Home Performance with Energy Star Keep Cool (renamed Stay Cool in 2004) Assisted Multifamily Visit getenergysmart.org for more info. REAP/Low-Income

8. Created nearly 1200 permanent jobs Helping 200+ businesses stay competitive and remain in New York Successfully introduced over 140 NYS energy or environmental products/services into commercial use $200 million in cumulative sales for products developed through NYSERDA funding NYSERDA’s R&D Program Since 1991

9. New York Energy $martSM Budget for Renewables, Distributed Generation and Combined Heat & Power $208 Million over 5.5 years $37.8 Million per year

10. DG: Fossil fuel or renewable fuel based power generation close to load/demand. Renewables: PV, Wind, Biomass, landfill/digester gas, etc. Fossil Fuel: Diesel, Natural Gas. DG Applications: Premium Power, Back up/Standby, Peak Shaving, Base load/CHP Distributed Power Generation (DG)

11. 10 Premium Power Backup/Standby 1.0 Peak Shaving .25 Baseload/CHP .05 4800 8760 2000 500 Cost of DG Power $/kWh Operating Hours per year

12. Combined Heat and Power (CHP) CHP: Onsite coincident production and use of electrical or mechanical power and thermal energy.

13. Fuel “in” at one place, multiple benefits “out” yields financial savings. Diversification of energy supply sources yields greater reliability ====> Energy Security. Return on investment: DG/CHP ====> every day. Emergency generator ====> sporadically. Benefits of DG/CHP

14. Fuel “in” at one place, multiple benefits “out”

15. How DG Technologies Compare?

16. Industrials Represent 78% of Existing CHP in New York New York’s Existing CHP Capacity: 5,070 MW

17. New York’s CHP Technical Potential 8,477 MW (Thermal Demand Sized) Industrial Potential: 1948 MW 60% is in Systems Below 5 MW Commercial/Inst. Potential: 6529 MW 78% is in Systems Below 5 MW www.nyserda.org/CHPFinalReport2002WEB.pdf Source: Energy Nexus Group

18. Cumulative CHP Market Penetration Projection by 2012 in NYS (MW) Note: 0.05 MW = 50 kW 0.5 MW = 500 kW

19. CHP Benefits At Full Market Penetration

20. Potential Additional CHP in Northeast Source: Bruce Hedman, Energy and Environmental Analysis, Inc. November 2003

21. www.eere.energy.gov/de/technologies/euii_chp_app_rac.shtml

22. Northeast Regional Combined Cooling, Heating and Power Applications Center Mission: Facilitate the technology transfer and deployment of advanced CHP. Region: 7 state region of Northeast USA. Services: Education, outreach, and technical assistance. Constituency: CHP for both buildings and industrial settings. Guidance: State Advisory Board, NECHPI. DOE Funding $300,000 Center Co-Directorships Pace Energy Project UMass Center for Energy Efficiency and Renewable Energy $300,000 DOE Funding for NERAC Special Projects in New York - FY 2003 www.northeastchp.org

23. New York’s DG (/CHP) Incentives • $15 Million SBC Funds through NYSERDA • Standby Service Rates: CHP Exemptions and Phase-ins • Std. Interconnection Requirements (in Update) • Electric Utility DG Pilot Program (Grid Upgrade vs. DG) • DG Gas Distribution Prices + Gas Utility DG Programs • State Education Dept Funding for K-12 Schools • NYC EDC – Energy Cost Savings Program • Elimination of flex-rate deterrent • Air Emissions Standards (in development) • Emissions Reduction Credits (in development)

24. NYSERDA’s DG-CHP Program • Develop & Demonstrate Innovative DG Technologies & CHP Applications • Support site-specific and sector wide feasibility studies and replication • Monitor Performance and Reduce Hurdles through Shared Knowledge • Install Megawatts of Generation Capacity • Funding: Cost share of 30 – 60% of Project cost subject to a cap of $1 million per project

25. Other States with SBC-like Funds & DG/CHP Interest • California – Self-Generation Incentive Program and California Energy Commission’s DG Programs • New Jersey – DG-CHP Incentive Programs (in Development) • Massachusetts – Renewables Incentives, Mass Tech Initiatives • Connecticut – Support for Fuel Cells, Connecticut Clean Energy Fund • Texas and Others?…..

26. Eligible Technology Incentive Max % of Project Cost System Size LEVEL 1 Photovoltaic, Fuel cells operating on renewable fuels, Wind turbines $4,500 per kW 50% 30 – 1,500 kW LEVEL 2 Fuel cells operating on non-renewable fuel and utilizing waste heat recovery $2,500 per kW 40% Up to 1,500 kW LEVEL 3-R Micro-turbines, internal combustion engines and small gas turbines operating on renewable fuel $1,500 per kW 40% Up to 1,500 kW LEVEL 3-N Micro-turbines, internal combustion engines and small gas turbines operating on non-renewable fuel, utilizing waste heat recovery and meeting the reliability criteria $1,000 per kW 30% Up to 1,500 kW California’s Self-Gen Program

27. New Jersey’s CHP Incentive Program Requires 5 year service warranty and/or 5 year service contract Funding of $4 million per year available Summer ‘04

28. NYSERDA’s DG-CHP Demonstration Program Installations (kW) NYSERDA Funding = $46 million Total Funding = $220 Million

29. Two 60 kW Capstones Peak Reduction: 300 kW Application: Swimming Pool Power to water pumps Heat to electric water heaters NYSERDA: $310000; SUNY & G.Trane: $310,000 Status: Fully Operational Measured in 2003: Savings = $35,000 per year Annual Fuel Use Effic. ~ 50% SUNY Buffalo/Grester Trane

30. Utilize one Capstone 60 kW Microturbine. Integrated with Munters DryCool Desiccant. Good opportunity for technology transfer. Lessons in Interconnection. Status: Fully Operational. Waldbaums Supermarket

31. Building has been converted from the headquarters of Bulova Watch Co. to a state of the art office building. Utilizing (2) 350-ton gas engine driven chillers. Peak Demand Reduction of 526 kW Excellent thermal efficiency. Bulova @ LaGuardia Airport

32. Two 750 kW Natural gas Recip. Engines Heat recovered for space and DHW heating and a 300 ton absorber NYSERDA: $500,000; GRIA $2,000,000 Status: Fully Operational. Greater Rochester International Airport

33. Islanded application – Three Recip engines (2 NG, 1 Diesel), 850 kW Heat recovery: space heating and DHW Integrated with load management strategies (Ex: thermal storage) NYSERDA: $425,000 Oakwood: $563,000 Status: Fully Operational. Oakwood Healthcare Center

34. Eight UTC PAFC Fuel Cells at Four Municipal Waste Water Treatment Facilities in New York City (NYCDEP) Heat Recovered to Support Anearobic Digester Reduced On-site Emissions by Eliminating Flare NYSERDA: $1,000,000; NYPA: $12,000,000 All 8 Fully Operational. Fuel Cells at WWTP in NYC

35. 250 kW molten carbonate fuel cell Hoisted into place (rooftop setback) November 2004 Heat recovery for DHW Fuel Cell at Sheraton Hotel in NYC

36. NYSERDA’s Fuel Cell Demonstrations

37. Regional CHP Activity - Lack of similar CHP (/DG) interest among various states Standby Rates - NYS PSC developed standby tariffs with CHP exemptions and phase-ins, other states like MA are in the process of developing tariffs Emissions Standard - NYS DEC is in the process of developing air emissions standards. Others ? Interconnection – NYS has just updated its SIR to 2 MW and to networks Utility Buy-In - Grid support, congestion mitigation, alternative to grid expansion/upgrade, utility ownership or access to excess capacity DG-CHP Challenges

38. New York’s CHP Program Summary • Supporting 96 demo projects, 50+ feasibility/Tech Trans. studies • NYSERDA demo funding of $46 million (in ~$220 M) • 27 Projects with a total installed capacity of 12 MW in operation • Expect to reach 20 MW of capacity the end of 2004 (peak demand reduction of 26 MW) • Additional capacities of 40 MW and 48 MW in ’05 and ’06, respectively • CHP applications in industrial, agricultural, municipal, institutional, commercial, and residential sectors • Field-Performance: Monitoring and Data Collection is Underway