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Is Combined Heat and Power Right for Your Facility?

From the Winter 2009 issue of Energy Matters

Are you thinking of installing a combined heat and power (CHP) system in your facility? Considering the complexities of adding a CHP system to your plant, planning for your installation requires significant time, effort, and investment. To help you get started, DOE's Industrial Technologies Program has developed the following steps to help you to determine if CHP is feasible for your site.

STEP 1: Walk-through Analysis

To begin the screening analysis, you will first need to collect data describing your plant's energy use, and operating and site conditions. Once that is completed, use the simple screening tool below to help you decide whether a detailed analysis is appropriate.

This diagram shows a decision tree for evaluating whether CHP is likely to be cost-effective for a particular installation. 1. The user begins in the top left box which asks "Have all cost-effective energy savings measures been considered?" An arrow labeled "No" points to a box to the right which states "Undertake a side energy assessment to identify and implement measures that would result in significant electric and/or thermal energy." 2. A second arrow points from the top left box straight down and is labeled "yes." This arrow points to a box that reads "Review site conditions: Is there adequate access, space, fuel, supplies?" An arrow labeled "no" emerges from this box and points to a box that states "CHP is unlikely to be cost-effective." 3. An arrow labeled "yes" points downward from the box in number 2 to another box that asks "Is the average site electrical load during operating hours greater than 250 kW?" An arrow labeled "no" emerges from this box and points to a box that states "CHP is unlikely to be cost-effective." 4. An arrow labeled "yes" points from the box in number 3 downward to another box that asks "Is the average site thermal load during operating hours greater than 1,000 lbs/hr steam, 700,000 Btu/hr hot water, or 1,000,000 Btu/hr fuel input?. An arrow labeled "no" points to a box on the right that asks "Are there any other potential thermal loads (i.e. direct heat, chillers, desiccants)?" An arrow labeled "no" points from this box to another box that states "CHP is unlikely to be cost-effective." 5. If the answer to the question in number 4 is yes, the arrow points down to another box that asks "Is the number of hours per year when the electrical load and thermal load are simultaneously at or above their average values greater than 2,000?" An arrow labeled "no" points to a box that states "CHP is unlikely to be cost-effective." 6. An arrow labeled "yes" points down to a final box which states "Use the CHP Walk-through Payback Estimator." Link to Energy Assessments Link to CHP Walk-through Payback estimator.

STEP 2: Feasibility Analysis

If the walk-through analysis gives you the thumbs-up, the next step is a screening analysis that considers more specific details, including the following:

  • Detailed electric tariffs (retail service rates, partial service rates, standby/back-up rates, transmission and distribution tariffs)
  • Fuel availability and price
  • Capital budget
  • Operating modes (baseload, thermal following, electric following)
  • Grid interconnection requirements and costs
  • Environmental permitting requirements and costs
  • Project structure and development costs (insurance, administrative and management fees, financing.

For help with your feasibility analysis, consider one of the CHP software tools (PDF 3 MB) listed in this survey of available tools. Download Adobe Reader.

STEP 3: Preliminary Design

A positive feasibility analysis should lead to a more thorough evaluation that will provide enough information to make a decision, and consider the following factors:

  • Analysis of hourly energy requirements and costs
  • System part load performance
  • System design and preliminary costs
  • Return on investment/payback analysis
  • Analysis of existing CHP systems.

STEP 4: Detailed Design

If the preliminary design evaluation is favorable, specification for bids would then be prepared for detailed project design and development.

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