1. Combined Heat and Power
(CHP) at Industrial Facilities
Satish Ravindran, P.E., CEM, - Sr. Energy Engineer - SW CHP TAP
Suresh Jambunathan – Director Business Development;
Veolia North America
May 12 , 2016

2. CHP Technical Assistance Partnerships
 Education and Outreach
Providing information on the energy and non-energy
benefits and applications of CHP to state and local
policy makers, regulators, end users, trade
associations, and others.
 Technical Assistance
Providing technical assistance to end-users and
stakeholders to help them consider CHP, waste heat
to power, and/or district energy with CHP in their
facility and to help them through the development
process from initial CHP screening to installation.
 Market Opportunity Analysis
Supporting analyses of CHP market opportunities in
diverse markets including industrial, federal,
institutional, and commercial sectors

4. Outline
 CHP Overview
 CHP in Industrial Facilities - Veolia
 CHP Project Resources from the DOE SW CHP TAP
 Q&A

5. CHP Overview

6. Fuel 100
units
CHP
75% efficiency
Total Efficiency
~ 75%
Fuel
Fuel
30
units
Power Plant
32% efficiency
(Including T&D)
Onsite Boiler
80% efficiency
45
units
Electricity
Heat
Total Efficiency
~ 50%
94
units
56
units
30 to 55% less greenhouse gas emissions
CHP efficiently recycles wasted energy to reduce
operating costs & emissions but increases reliability

7. CHP System Schematic
Prime Mover
Reciprocating Engines
CombustionTurbines
Microturbines
SteamTurbines
Fuel Cells
Electricity
On-Site Consumption
Sold to Utility
Fuel
Natural Gas
Propane
Biogas
Landfill Gas
Coal
Steam
Waste Products
Others
Generator
Heat Exchanger
Thermal
Steam
HotWater
Space Heating
Process Heating
Space Cooling
Process Cooling
Refrigeration
Dehumidification

8. Common CHP Technologies
50 kW 100 kW 1 MW 10 MW 20 MW
Fuel Cells
Gas TurbinesMicroturbines
Reciprocating Engines
Steam Turbines

9. CHP Today in the United States
• 82.7 GW of installed CHP at over
4,400 industrial and commercial
facilities
• 8% of U.S. Electric Generating
Capacity; 14% of Manufacturing
• Avoids more than 1.8 quadrillion
Btus of fuel consumption annually
• Avoids 241 million metric tons of
CO2 compared to separate
production
Source: DOE CHP Installation Database (U.S. installations as of
December 31, 2014)

10. Attractive CHP Markets
Industrial
Chemicals
Refining
Food processing
Petrochemicals
Natural gas pipelines
Pharmaceuticals
Rubber and plastics
Pulp and paper
Commercial
Data centers
Hotels and casinos
Multi-family housing
Laundries
Apartments
Office buildings
Refrigerated warehouses
Restaurants
Supermarkets
Green buildings
Institutional
Hospitals
Schools (K–12)
Universities & colleges
Wastewater treatment
Correctional Facilities
Agricultural
Dairies
Wood waste
(biomass)
Concentrated
animal feeding
operations

11. Emerging National Drivers for CHP
o Benefits of CHP recognized by
policymakers
o President Obama signed an Executive Order to
accelerate investments in industrial EE and CHP on
8/30/12 that sets national goal of 40 GW of new CHP
installation over the next decade
o State Portfolio Standards (RPS, EEPS), Tax Incentives,
Grants, standby rates, etc.
o Favorable outlook for natural gas
supply and price in North America
o Opportunities created by
environmental drivers
o Utilities finding economic value
o Energy resiliency and critical
infrastructure
DOE / EPA CHP Report (8/2012)
http://www1.eere.energy.gov/manufacturing/distributede
nergy/pdfs/chp_clean_energy_solution.pdf

12. Finding the Best Candidates:
Some or All of These Characteristics
 High and constant thermal load
 Favorable spark spread
 Need for high reliability
 Concern over future electricity prices
 Interest in reducing environmental impact
 Existing central plant is dilapidated
 Planned facility expansion or new
construction; or equipment replacement
within the next 3-5 years

13. Where are the Southwest opportunities for CHP
Industrial Applications?
(8,937 MW of CHP Potential at 5,607 Sites)
Source: DOE CHP Technical Potential Study (2016)
- 1,000 2,000 3,000 4,000 5,000 6,000
Wyoming
Utah
Texas
Oklahoma
New Mexico
Colorado
Arizona
CHP Generating Capacity (MW)
CHPTechnical Potential for Industry
50-500 kW 0.5 - 1 MW 1 - 5 MW 5-20 MW >20 MW

14. Project Snapshot:
Port Arthur Steam Energy/Oxbow
Port Arthur, TX
Application/Industry: Petroleum Coke, Crude
Oil Processing
Capacity (MW): 5 MW
Equipment: Waste heat recovery boilers; back
pressure steam turbine
Fuel Type: Waste Heat
Thermal Use: Steam and electricity generation
Installation Year: 2005
Environmental Benefits: CO2 Emissions
reduced by 159,000 tons/year
Testimonial: “Through the recovery of
otherwise-wasted heat to produce
high pressure steam for crude oil
processing, Port Arthur Steam Energy
LLP has demonstrated exceptional
leadership in energy use and
management.” — U.S. Environmental
Protection Agency, in giving the 2010
Energy Star Award

15. Project Snapshot:
Tesoro Petroleum
Salt Lake City, UT
Application/Industry: Refineries
Capacity (MW): 22 MW
Prime Mover: Gas Turbine and HRSG
Fuel Type: Natural Gas
Thermal Use: Process Steam
Installation Year: 2004
Environmental Benefits: CO2 Emissions
reduced by 85,100 tons/year
Testimonial: The site can produce
energy for $35-$40 per megawatt-hour,
enabling it to save $200,000 per month
on its energy bill. Additionally, it sells
$300,000 of energy per month to its
utility, making a net improvement to its
operations of $500,000 per month.

16. CHP in Industrial Applications
- Veolia North America

17. 4-Chicago based industrial CHP visionaries
Thomas Casten, Chairman
Recycled Energy Development (RED)
Leif Bergquist, Vice President
Recycled Energy Development (RED)
Sean Casten, CEO
Recycled Energy Development (RED)
Richard J. Munson, Director
Environmental Defense Fund

18. Veolia North America
Who is Veolia?
Project development tips & tools
Selected references

19. Who is Veolia?

20. The big picture: US Industrial activity is up!
Courtesy: Industrial Info. Resources, Inc, SugarLand TX 77479

21. A common industrial project planning scene
UTILITIES: Flip side of a process.
Power
Thermal Energy delivered as
steam
hot water
thermal oil
refrigerant
Compressed air, lighting
Water treatment
Wastewater treatment
XYZ Chemical Company:
Boss: We’re investing $$$$$$$ to build process XYZ
Assistant: What about utilities?
Boss: Utilities?......... Just get it done
Assistant to Plant Manager: Get it done
Plant Manager:
Picks package boiler from “bigger & better boiler” company.
Pays $$$$ to utility to upgrade electrical substation
Rule of Thumb: $$Utilities = 10% - to - 40% of $$Process

22. CHP project development = sense + diligence
Set objectives & gather data
Quickly conceptualize configurations + appraise (FEL2 or FEL3)
Project development
Technical: Configuration, engineering, procurement, construction
Legal: Structure of contracting entities (LLC, S or C Corp etc…)
Commercial: Contracts for fuel, power, O&M, grants & incentives
Environmental: Permits
Financial: Financial models, equity & debt
Risks & Mitigants: Project Execution Plan (PEP)
Create value by “profitably recycling energy” from concept (FEL1) to completion (FEL5).
CHP at Univ. of MA. Eff. > 80%
Central generation. Eff. ~35%

23. Graph & ponder load (power + thermal)
profiles, then sketch “promising” concepts

24. A rigorous Heat & Mass Balance (HMB) sizes
& prices the project + aids off-design analysis

25. CHP can economically tie energy-to-water (or
wastewater) + constitute core of a microgrid.
http://www.wrri.nmsu.edu/publish/watcon/proc56/Al-Qaraghuli.pdf
Profitably reduce GHG emissions:
• Fresh water “stores” energy, thus optimizing utility supply.
• Result ? Least cost/unit of power, steam, water

26. A successful project = risk mitigation

27. A schedule helps… even if (usually) wrong

28. Project structure: A Special Purpose Entity
(“NewCo LLC”) can reduce investor risk

29. Implementation: Front End Loaded (FEL) view

30. Project development tailwinds & headwinds
TAILWINDS HEADWINDS
Tried & true technology
CHP seen as a proven technology
Inertia and unfamiliarity
Compared to CHP, package boilers seen as “tried and true”
10% Investment Tax Credit (ITC)
Reduces Project CapEx; improves
Return on Investment (ROI)
Upfront investment
Greater upfront CapEx required.
Accelerated depreciation
Improves Return on Equity (ROE)
Air permit
CHP reduces pollution, yet requires a new permit
MACT pollution control regulations allow retaining current air permit.
Increasing recognition of the benefits
of redundancy, resiliency & reliability
Energy Policy Act, 2005
Hurts ability of regulated utilities to secure certain cost recovery for
long-term Power Purchase Agreements (PPA) with CHP plants.
Makes CHP financing difficult
Standby & exit charges
Imposed by some utilities before allowing CHP systems to interconnect
with the grid.

31. The Boston-Cambridge area uses CHP and
distributes recaptured thermal energy as "green
steam," reducing greenhouse gas emissions by
475,000 tons annually, the equivalent of
removing 80,000 cars from the road.
The Boston-Cambridge network was recognized
as 2015 System of the Year by the International
District Energy Association.
Selected Veolia CHP Case Studies
"Veolia has been a strong and loyal partner with
the city, and the completion of this project marks
an important step forward in attaining our
Greenovate Boston goal of reducing Boston's
greenhouse gas emissions 25% by 2020 and 80%
by 2050." -Boston Mayor Martin J. Walsh

32. Reference: MATEP Cogeneration Plant
 Located in Boston, MA
 Power, heating & chilling for complex with 2000
beds + 135,000 patients/yr
 Capacities
◦ Power: CHP 47 MW (83 MW total)
◦ Steam: 970 Kpph
◦ Chilling: 42,000 Tons
 Distribution piping: steam + chilled water
 Fuel: Natural Gas
 Long-term O&M for a mini-utility providing the
energy requirements of six hospitals and
encompassing electricity, heating, cooling and
distribution.
.
The Longwood medical area in Boston, is
home to six prominent hospitals that are
affiliated with Harvard Medical School.
Medical Area Total Energy Plant (MATEP)
supplies the hospitals with steam, chilled
water, and electricity, serving more than 9
million square feet of space.

33. Reference: Grays Ferry Cogeneration Plant
 Located in Philadelphia, PA
 Steam for Veolia Energy Philadelphia District Energy
network plus power for the gird
 CHP capacity : 170 MW + 1,444 Kpph
◦ Gas Turbine: 120 MW
◦ Steam Turbine: 50 MW
◦ HRSG: 711 Kpph
◦ Package boiler: 735 Kpph
 Fuel: Natural Gas
 U.S. Environmental Protection Agency’s Leadership
Award for reducing greenhouse gas emissions.
 “Power Plant of the Year Award” from Power
Magazine.
This facility serves ~ 300 customers, including
the University of Pennsylvania, in the central
business district of Philadelphia and
surrounding area.
Over 90% of the system’s steam demand is
supplied from the CHP heat recovery systems.

34. Reference: Biogen IDEC Cogeneration Plant
 Located in Cambridge, MA
 Steam and cogenerated power for campus needs
 CHP capacity : 5 MW + 27 Kpph
◦ Gas Turbine: 5 MW
◦ HRSG: 27 Kpph
◦ Veolia Energy Cambridge steam network
provides backup service
 Fuel: Natural Gas
 SourceOne, Veolia Energy’s energy management and
advisory services subsidiary managed the CHP
project from concept to completion
 Veolia Energy performs comprehensive O&M. Initial
Initial 5-year agreement with performance guarantee
was recently renewed for an additional 5-years

35. Reference: New York University CHP Plant
 Located in New York City, NY
 CHP capacity (after expansion): 13.4 MW + 90 Kpph
◦ 2-Gas Turbine: 6.7 MW each
◦ 2-HRSG: 45 Kpph each
 Fuel: Natural Gas
 SourceOne, Veolia Energy’s energy management and
advisory services subsidiary served as Owners
representative and managed the CHP project from
concept to completion
 The CHP is the heart of a microgrid that saves $5
MM/yr and serves 22-buildings with power,
steam/hot water
 2013 EPA Energy Star awardee

36. How to Implement a CHP Project with the Help
of the CHP TAP

37. CHP TAP Technical Assistance

38.  High level assessment to
determine if site shows
CHP project potential
◦ Qualitative Analysis
– Energy Consumption & Costs
– Estimated Energy Savings &
Payback
– CHP System Sizing
◦ Quantitative Analysis
– Understanding project drivers
– Understanding site
peculiarities
DOE TAP CHP Screening Analysis
38
Annual Energy Consumption
Base Case CHP Case
Purchased Electricty, kWh 88,250,160 5,534,150
Generated Electricity, kWh 0 82,716,010
On-site Thermal, MMBtu 426,000 18,872
CHP Thermal, MMBtu 0 407,128
Boiler Fuel, MMBtu 532,500 23,590
CHP Fuel, MMBtu 0 969,845
Total Fuel, MMBtu 532,500 993,435
Annual Operating Costs
Purchased Electricity, $ $7,060,013 $1,104,460
Standby Power, $ $0 $0
On-site Thermal Fuel, $ $3,195,000 $141,539
CHP Fuel, $ $0 $5,819,071
Incremental O&M, $ $0 $744,444
Total Operating Costs, $ $10,255,013 $7,809,514
Simple Payback
Annual Operating Savings, $ $2,445,499
Total Installed Costs, $/kW $1,400
Total Installed Costs, $/k $12,990,000
Simple Payback, Years 5.3
Operating Costs to Generate
Fuel Costs, $/kWh $0.070
Thermal Credit, $/kWh ($0.037)
Incremental O&M, $/kWh $0.009
Total Operating Costs to Generate, $/kWh $0.042

39. CHP Project Resources
DOE/EPA Catalog
of CHP Technologies
(updated 2014)
Good Primer Report
http://www.epa.gov/chp
/technologies.html
www.eere.energy.gov/chp
DOE Project Profile
Database (150+ case
studies)
www.eere.energy.gov
/chp-profiles
www.dsireusa.org
DOE Database of
incentives & policies

40. Next Steps
Resources are available to assist in developing CHP Projects.
Contact the Southwest CHP TAP to:
 Perform CHP Qualification Screening for a particular facility
 Identify existing CHP sites for Project Profiles
 Additional Technical Assistance

41.  CHP plays a key role in the industrial processes
providing energy savings, reduced emissions, and
opportunities for resilience
 Emerging drivers are creating new opportunities to
evaluate CHP and numerous examples exist to learn
more how industrial facilities have incorporated CHP
 Engage with the US DOE Southwest CHP TAP to learn
more about the technical assistance offerings in
evaluating CHP in your facility
Summary

42. Thank You!
Satish Ravindran, P.E., CEM
Houston Adv. Research Center
4800 Research Forest Drive
The Woodlands TX
Ph: 281-363-7906
sravindran@harcresearch.org
Suresh Jambunathan
Director of Business Development, Veolia
700 East Butterfield Road, Suite 201
Lombard IL 60148
Ph:630-335-4544
suresh.jambunathan@veolia.com