Energy Efficiency Guide for Colorado Businesses

Energy Efficiency Measures

COMBINED HEAT AND POWER

To learn more about CHP, visit the website of the Intermountain CHP Center. The Intermountain CHP Center promotes greater adoption of combined heating, cooling, and power technologies in the states of Arizona, Colorado, New Mexico, Utah, and Wyoming. The Center works in the areas of project support and facilitation, education and outreach, market assessment, policy review, and coalition building. Visit the Intermountain CHP Buyer’s Guide website to access information about vendors, contractors, and distributors who can turn your project idea into reality.

Combined heat and power (CHP), also known as cogeneration, refers to generating electricity at or near the place where it is used. The waste heat from the electricity generation can be used for space heating, water heating, process steam for industrial steam loads, humidity control, air conditioning, water cooling, product drying, or for nearly any other thermal energy need. The end result is significantly more efficient than generating each of these separately. CHP is sometimes called “recycled energy” because the same energy is used twice—once for electrical energy and once for thermal energy.

CHP systems are more efficient for two reasons: avoided thermal losses and avoided transmission and distribution losses. The average power plant in the US has an electrical efficiency of 33%, and even the best state-of-the-art plants can only get to the high 50s. The rest is turned into heat, and since power plants are typically located in remote areas far away from commercial and industrial areas that could use the heat, this thermal energy gets wasted. In addition, another 5-10% of the electrical energy is lost while it’s being delivered long distances over transmission and distribution lines. On the other hand, smaller power plants can be located close to or even within facilities which can make good use of both the electricity and the heat, thereby raising the net total efficiency of generating electricity by a factor of two or more and saving substantial energy and money. The total efficiency of CHP plants is often 80% or higher.

Equipment

CHP systems use one or more of the following prime movers: reciprocating engines, turbines, microturbines, fuel cells, or Stirling engines. Reciprocating engines and turbines, respectively, are the most common in Colorado. Microturbines can be a good fit in particular applications. Fuel cells and Stirling engines, which could still be classified as “emerging technologies,” each have a unique set of advantages that might make them worth investigating, though they are somewhat more expensive.

Any of these can be configured to provide domestic water or space heating, using their waste heat. Some can also be configured to provide process steam or product drying.

For cooling and air conditioning applications, the waste heat can be used to run an absorption chiller, adsorption chiller, steam chiller, or a desiccant dehumidification unit. Of those options, absorption chillers are the most common and most applicable for our region. A CHP system with an absorption chiller could provide heating in the wintertime and cooling in the summertime.

Sizing the equipment to meet a site’s thermal load is usually the best approach, though a detailed analysis can determine the best size and configuration. Sites with a fairly high and constant thermal load tend to yield the best economics for CHP.

Fuel

CHP units typically run on natural gas. High and volatile natural gas prices represent the single biggest risk factor for installing a CHP system. Any good economic analysis or feasibility study of CHP should include different scenarios for future natural gas prices.

There are alternatives to using natural gas as the fuel, many of which can be quite cost effective in Colorado. Any site with waste organic material can produce methane, which in turn can be used to fuel the CHP. Food and beverage processing, landfills, wastewater treatment plants, agricultural and feedlot operations, and forestry thinnings are some of the sources where methane can be captured and used in CHP. These approaches are growing more and more common, especially in Colorado. The fuels are also called opportunity fuels, waste fuels, biogas, biofuels, biomass, or bioenergy. A few modifications to the equipment and/or some additional fuel conditioning equipment may be required in order for standard CHP equipment to use the fuel successfully.

Considerations

Other considerations for planning a CHP project, besides sizing the equipment correctly and carefully considering natural gas price scenarios, include:

  • Utility interconnection policies and standby rates
  • The possibility of selling excess electricity to the grid when generating more than is needed
  • Looking for available grants and incentives before proceeding with a project

For additional information, visit the Intermountain CHP Center website.


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