CHP Generation Captures Heat — and Imagination

From wastewater-treatment facilities to swimming pools, from factories to apartment buildings, combined heat and power (CHP) units have long provided American energy. But they have been underutilized, something proponents hope is changing.

CHP is on-site electricity generation that captures the heat that would otherwise be wasted to provide useful thermal energy such as steam or hot water that can be used for space heating, cooling, domestic hot water, and industrial processes. CHP can achieve efficiencies of more than 80%, compared to 50% for conventional technologies (i.e., grid-supplied electricity and an on-site boiler), says the Environmental Protection Agency (EPA).

According to EPA, CHP has a long history, especially in the United States. Decentralized CHP systems located at industrial and municipal sites were the foundation of the early electric power industry in the U.S. However, as power generation technologies advanced, the power industry began to build larger central-station facilities to take advantage of increasing economies of scale.

“The average efficiency of power generation in the United States has remained at 34% since the 1960s—the energy lost in wasted heat from power generation in the U.S. is greater than the total energy use of Japan,” EPA reports. “CHP captures this waste energy and uses it to provide heating and cooling to factories and businesses, saving them money and improving the environment.”

EPA notes that in the U.S., CHP is used in factories, apartment buildings, and commercial/institutional buildings such as offices, hospitals, and universities, as well as in municipal applications such as wastewater-treatment facilities and swimming pools. CHP’s principal benefits are:

• Reduced electricity cost

• Reduced emissions of green house gases and other pollutants

• Increased electricity-supply reliability

The Propane Education & Research Council (PERC) has partnered with locations and companies to bring CHP to the forefront. Notably, propane-fueled CHP units were demonstrated at the Kauai Marriott Resort and Beach Club in Hawaii from November 2008 to April 2010.

The full-service resort maintains more than 1 million square feet, including 350 hotel rooms and 200 time-share apartments, a 26,000-sq-ft pool, and an 18-hole golf course.

The new system replaced two 20-year-old, 140-ton heat pumps for hot water and supplemental cooling, and two diesel-fired steam boilers for laundry and kitchen use. The new system included two Caterpillar 3412LE generator sets, a heat recovery system, and a 244-ton absorption chiller.

Two generators, each 405-kw, were installed, and 580,969 gallons of propane were used annually. Operational savings were more than $1.7 million, with bottom-line savings of more than $570,000. Importantly, annual emission savings were achieved: 22 tons of nitrogen oxides, 9824 tons of carbon dioxide, and 45 tons of sulfur dioxide. The payback period was 6.3 years.

In another project, this one with Green Mountain Coffee Roasters, PERC participated in a research effort with the goal of providing continuous power to the company’s coffee roasting and packaging operations and hot water and space heating with a propane-fueled reciprocating engine CHP system.

“In 1999, Northern Power Systems installed a 95-kw CHP unit in conjunction with Green Mountain Coffee Roasters’ original roaster line. This CHP system reliably sustained all critical electrical loads, with numerous grid fluctuations resulting in neither downtime nor product loss,” says PERC. Further, the Heat Recovery Project built on the success of the first CHP unit, and a 280-kw CHP plant was installed for the expanded roaster line. Both systems offer highly reliable power and incorporate heat recovery for potable hot water and space heating.

For the Kauai Marriott and Green Mountain projects, PERC provided co-funding to large U.S. Department of Energy projects. The council participated on the project teams while the initiatives were running and provided technical input, according to Greg Kerr, director of research and development at PERC.

Meanwhile, a small but growing percentage of Capstone Turbine Corp. units are propane and/or butane, says Jim Crouse, executive vice president of sales and marketing.

Butane is relatively new for the company. Testing had been done, but with the recent shipment of a C600S microturbine system to a village in Mali, Capstone has entered into the market of butane units. It’s expected to be operational in three to six months. Capstone is also working in the Caribbean and the Pacific islands, where the fuel of choice is a butane/propane mix, and West Africa, where it’s butane.

Three Capstone propane-fueled C1000 microturbines were installed at three different locations on Maui in 2016. Two C1000s replaced the existing diesel-engine generator combined cooling, heat, and power (CCHP) systems at two sites, and both C1000s operate in CCHP applications. A third C1000 was installed at a new location and operates as a CHP application.

The high cost of electricity makes Maui an ideal spot for cogeneration and trigeneration, according to Capstone. The clean waste heat from the exhaust of each microturbine is captured by heat recovery modules to heat domestic water, swimming pools, and spas. In addition, absorption chillers are used in the CCHP systems to provide air conditioning. The microturbines were expected to reduce the operating costs of each resort by lowering their overall energy usage and reducing their demand during peak hours.

Finally, two C1000 Signature Series microturbines are expected to be installed by early 2018 to enhance an existing diesel generator power plant for a commercial customer in Fiji.

“Pacific island states face unique challenges in expanding access to electricity, given that their populations are spread across tens of thousands of islands,” said Darren Jamison, Capstone’s president and CEO, in a statement. “Capstone propane-fueled microturbines are scalable and allow for rapid deployment in these challenging geographies.”

The company’s relationship with propane dates back 15 to 20 years, says Crouse, “but what’s changed in the last couple of years is that the oil and gas industry prices have changed the price of propane. Costs have stabilized. The big change for us and the industry is that the current propane market is better than it’s been—more of a buyer’s market than a seller’s market.”

The installed cost of units can run $1500 per kw to $3000 per kw, with the smaller installations running higher on a cost-per-kw basis than the bigger machines, Crouse says. Advantages for propane and butane include a significant economic benefit, and they replace a dirtier fuel. “The main driver is almost always the saving of money.” Of the Capstone systems, 45% are fueled by natural gas, 45% by oil or gas, and 10% are a mix that includes propane.

“While CHP has been in use in the United States in some form or another for more than 100 years, it remains an underutilized resource today,” says EPA. “CHP currently represents approximately 8% of U.S. generating capacity compared to more than 30% in countries such as Denmark, Finland, and the Netherlands. Its use in the U.S. has been limited, particularly in recent years, by a host of market and non-market barriers.

“Nevertheless, the outlook for increased use of CHP is bright. Policymakers at the federal and state level are beginning to recognize the potential benefits and the role it could play in providing clean, reliable, cost-effective energy services to industry and businesses. A number of states have developed innovative approaches to increase the deployment of CHP to the benefit of users, utilities, and ratepayers. CHP is being looked at as a productive investment by some companies facing significant costs to upgrade outdated coal- and oil-fired boilers. In addition, CHP can provide a cost-effective source of highly efficient new generating capacity.

“Finally, the economics of CHP are excellent as a result of the changing outlook in the long-term supply and price of North American natural gas, a preferred fuel for many CHP applications,” says EPA.

“We see the future of CHP in microgrid applications,” says Crouse. “With the aging utility grid, the microgrid has become a popular alternative among local government planners, universities and schools, and utility planners, particularly because of their backup power abilities. Microgrids incorporate multiple sources of power—and technologies like microturbines—to act as a more sustainable and efficient power hub.

“Capstone sees propane and butane as opportunity fuels given the low pricing to fuel-switch customers that currently run on diesel, operate in island locations, or run primarily on natural gas. We are continuously educating our customer base and expanding penetration into these markets.”