Overview of Baltimore Gas & Electric’s
Combined Heat & Power (CHP) Program
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1.
Energy Solutions for Business
Incentives up to 50% for retrofit projects or up to 75% of incremental costs for new
equipment
2.
Retrocommissioning (RCx)
Incentives up to 75% of the cost of the RCx assessment and equipment optimization
3.
Small Business Energy Solutions
Incentives up to 80% of the total cost of the project
4.
New
Combined Heat & Power (CHP)
Incentives up to $2 million towards the installation of a CHP unit
Combined Heat & Power is Part of BGE’s Smart Energy
Savers Program® Core Business Programs
These programs support the EmPOWER Maryland Energy Efficiency Act
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Background
In adopting BGE’s 2012-2014 energy efficiency programs, the Commission ordered MD utilities to develop new programs as a way to close the gap in meeting the EmPower Maryland goals
BGE filed its CHP program in April 2012 and received Commission approval in June 2012 as part of a joint utility filing
Initial budget of $20 million established amongst BGE ($10.3 million), Pepco and Delmarva Power
Proposals were solicited through a RFP process performed by each utility in the late summer of 2012 with bids due in December 2012 for BGE and
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RFP Results
BGE initially received 16 proposals for a variety of industrial and
commercial (I&C) customers including hospitals, universities,
secondary schools, industrial plants, state facilities and a new casino
Participants included I&C customers, CHP vendors, engineering
consultants, developers and ESCOs
So far, projects with ESCOs seem to be the best coordinated
11 projects initially passed the technical and engineering reviews
with 5 projects failing or being withdrawn by the participant
Gas service upgrades were required on several projects but upgrade
costs to customers have been minimum and have not stopped
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Incentive Structure
Up to $2 million per CHP project
Design Incentive = $75/kW (paid when initial design and gas costs are complete)
Construction Incentive = $175/kW (paid when unit is installed and commissioned)
Production Incentive = $0.07/kWh (paid for 18 months following commissioning)
Design & Construction Incentive capped at $1 million per project
Production Incentive capped at $1 million
Total Incentive design to average approximately $900 / kW
Incentives designed to cover 25 – 50% of the total cost of installation
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Basis for Incentive Levels
Incentive levels and requirements were based on best practices:
New Jersey’s Office of Clean Energy program provides incentives of $2,000/kW for units under 500kW and $1,000/kW for units between 500kW and 1,000kW.
Massachusetts provides $750/kW for both small and large CHP systems. The incentive is limited to no more than 50% of installed costs. Resulted in 24 CHP applications projects being approved in the first two years representing 52 MW and 227,000 MWh.
NYSERDA’s CHP grant program provides incentives that are 30% to 50% of the cost of a CHP project up to $2 million. 18 CHP projects completed representing 21 MW using over $18 million in NYSERDA funding.
Connecticut’s CHP program provides incentives up to $500/kW. 72 CHP projects have been approved and funded representing 250 MW and $105 million in incentives.
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Minimum Qualification Requirements
No net metering or exporting of electricity
Equipment can be natural gas or bio-gas turbine, micro turbine or reciprocating
engine (Fuel cells are also considered)
No project size limit but must maintain a system efficiency of 65%
Must pass BGE’s Total Resource Cost Test (> 1.0)
Subject to BGE’s Schedule S Standby Tariff
Must meet BGE’s Interconnections requirement
Must obtain proper MD Department of Environment permits
Customer responsible for all natural gas service upgrades
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Approved Project Characteristics
Project sizes ranged from two projects at 75 kW up to three projects
at 2,000 kW with the rest somewhere in between
Fuel sources were all natural gas and one bio-gas
All CHP systems were reciprocating engines with no turbines (only
fuel cell proposal was withdrawn by customer)
25% of the projects included absorbers for chilled water
Efficiency levels ranged from 68% to 82%
BGE incentives typically covered 20% to 45% of the development cost
Development cost ranged from $1,900/kW to $4,200/kW depending
on the size of the unit (smaller units had higher $/kW)
Payback periods ranged from 2.2 years to 11.6 years with incentives
and 4.1 years to 14.5 years without incentives
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Barriers and Lessons Learned
CHP project timelines are much longer than anticipated due to
customer decision making process and engineering interaction
Incentives do drive participation and project size (No CHP projects
were received before program began and no projects have been
larger than 2 MW (which is about where you reach the $2 million cap)
Don’t underestimate complexity of the internal customer approval
process – need top management’s full support to move forward
CHP is a complex/complicated process for customers. Need to engage
with them on an intimate 1 to 1 basis to promote the technology and
assist them throughout the entire implementation process
Facility engineers can be road blocks since they are responsible for
the additional operation and maintenance duties
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Current Status
In August 2013, BGE received Commission approval to increase its CHP budget by $10.7 million and provide incentives for projects approved by BGE by 2014 and completed by 2016
Twelve (of 18) CHP proposals making progress towards implementation
Nine projects pre-approved - 8.6 MW, 67,000 MWh
Design incentives paid on five projects -$201,000
Four projects have equipment on site, are testing their installations, and expect production to begin by the second quarter 2014
Several small, 75kW units at two Baltimore County schools and Johns Hopkins University and one large, 2 MW unit at a local hospital
Two additional mid-size projects to be completed in 2014
Remaining projects to be completed in 2015 along with discussions with five large customers for 2015 and beyond
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