EPA
CHP
O-EPA COMBINED HEAT AND
POWER PARTNERSHIP
Update
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Contents
2005 PARTNERSHIP UPDATE
INTRODUCTION 1
ENERGY STAR CHP AWARDS and CERTIFICATES 2
2005 ENERGY STAR CHP Award and Certificate Winners 3
STRATEGIC MARKET DEVELOPMENT 4
Dry Mill Ethanol Production 4
Wastewater Treatment 5
Hotels/Casinos 6
PARTNER ACCOMPLISHMENTS 7
PARTNER FOCUS 10
CHP Equipment Manufacturers 10
University of Cincinnati 11
New Jersey Clean Energy Program 12
POLICY HIGHLIGHTS 13
Connecticut Energy Legislation 13
Pennsylvania Alternative Energy Portfolio Standard 14
Alternative Language for the Clean Air Interstate Rule 15
TOOLS YOU CAN USE 16
Funding and Regulatory/Rates Database 16
CHP Project Development Process Tools 16
CHP Emissions Calculator 16
Clean Energy-Environment Guide to Action Fact Sheets 16
NEW PARTNERS 17
For additional information about the CHP Partnership, its accomplishments, tools, and services,
please visit www.epa.gov/chp or contact:
Kim Grossman
(202) 343-9388
crossma n. kim@epa. go v
Katrina Pielli
(202)343-9610
pielli. katrina@epa. go v
Tom Frankiewicz
(202) 343-9794
frankiewicz.thomas@epa.gov
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EPA's CHP Partnership
The U.S. Environmental Protection Agency (EPA) is pleased to present its first annual Combined Heat and Power (CHP)
Partnership Update.
2005 was an active year for the CHP Partnership! The Partnership now consists of 177 Partners, including energy users, energy
service companies, CHP project developers and consultants, equipment manufacturers, as well as federal, state, and local govern-
ment agencies. The Partnership has been actively working with stakeholders to support CHP project development and get the word
out about CHP's energy efficiency, economic, and environmental benefits. A significant reduction of greenhouse gas emissions can
be attributed to the Partnership through this work:
Through 2005, CHP Partners installed 3,460 megawatts (MW) of CHP with
Partnership assistance. The resulting emission reductions are equivalent to:
Annual emissions of
more than 1.6 million
automobiles
OR
Planting more than
2.5 million acres
of trees
In addition to providing direct project assistance and education and outreach, the Partnership enthusiastically encourages public
recognition of outstanding CHP projects. This year, the Partnership presented more than 25 ENERGY STAR CHP Awards and CHP
Certificates of Recognition at key events throughout the country—rewarding efficient CHP projects that demonstrate leadership in
environmental performance.
What Is the EPA CHP Partnership?
Power generation in the United States contributes to the emis-
sions of air pollutants and greenhouse gases. As power genera-
tion increases to meet increased demand, so will emissions.
While average power plant fuel conversion efficiency is around
33 percent, CHP (also called cogeneration) provides an oppor-
tunity to improve that efficiency and meet demand with less
fuel and reduced emissions per unit of power generated.
EPA established the CHP Partnership in an effort to publicize
the potential energy, environmental, and economic benefits of
using CHP to meet a greater portion of our nation's growing
energy demand.
Through the CHP Partnership, EPA offers a number of tools
and services that are designed to increase the deployment of
CHP. The CHP Partnership:
• Provides technical, economic, and regulatory assistance for
proposed projects.
• Maintains a current list of state and federal CHP and bio-
mass incentives, including grants, tax incentives, regulatory
treatment, and utility rates favorable to clean distributed
generation projects.
• Facilitates Partner marketing and networking.
Provides guidance and tools to help energy users become
educated CHP champions.
• Promotes the environmental benefits of CHP through the
ENERGY STAR CHP Awards, CHP Certificates of
Recognition, the CHP Emissions Calculator, and Partner
Greenhouse Gas Reduction Reports.
Engages in strategic market analysis and development.
• Informs state and federal policy makers on best practices to
promote the development of clean energy.
The EPA CHP Partnership is open to industry, institutions, ener-
gy users, and state, local, and tribal governments interested in
developing CHP projects and/or promoting the benefits of CHP.
If you are interested in joining, please visit www.epa.gov/chp.
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ENERGY STAR CHP Awards & Certificates
EPA and the U.S. Department of Energy (DOE) recognize highly efficient CHP projects that achieve significant fuel and emis-
sion savings over comparable state-of-the-art separate heat and power. Projects can receive either or both the ENERGY
STAR CHP Award and the CHP Certificate of Recognition. If your project is substantially thermally baseloaded (i.e., uti-
lizes most of the heat produced by the CHP system), it is a good candidate for an ENERGY STAR CHP Award!
Award Types
The ENERGY STAR CHP Award recognizes projects that reduce
emissions and use at least 5 percent less fuel than state-of-the-
art comparable separate heat and power generation.
The EPA CHP Certificate of Recognition recognizes efficient
CHP projects that demonstrate leadership in environmental per-
formance without achieving all the ENERGY STAR CHP Award
criteria.
When a project is selected for an Award or Certificate, EPA
sends a letter to the recipients and develops an announcement
highlighting the project's energy and environmental excellence.
The Award or Certificate is then announced on EPA's Web site.
In addition, the Partnership presents a plaque to the Award or
Certificate winners at a key event agreed upon by both the win-
ners and EPA.
How Fuel Efficiency is Compared
To qualify for an ENERGY STAR CHP Award, a CHP project
must use at least 5 percent less fuel than the state-of-the-
art separate heat and power system against which it is com-
pared. This comparison is performed against separate heat
and power generation (e.g., an onsite boiler and grid elec-
tricity) that uses a comparable fuel, the same power-to-heat
ratio, and incorporates transmission and distribution (T&D)
losses.
For example, a natural gas-fueled CHP system would be
compared to a natural gas combined cycle electric-only
plant and a natural gas-fueled boiler; adjustments are made
for T&D losses if the CHP project sells power to the grid.
Conventional
Generation
Combined
Heat & Power
Power Station Fuel
28
48
Units
Heat
Combined
Heat
& Power
(CHP)
The Application Process
Applying for the Award or Certificate is fairly simple, and the
Partnership will help facilitate the process as needed. For infor-
mation or assistance with the application, please contact Tom
Frankiewicz at frankiewicz.thomas@epa.gov.
Complete the electronic application at
www.epa.gov/chp/awards/how_to_apply.htm. EPA accepts
applications continuously throughout the year.
To qualify for an ENERGY STAR CHP Award, a project must:
• Be in commercial operation.
• Be operating within the emission limits stipulated in their
permits.
• Have a minimum of 12 months and 5,000 hours of meas-
ured operating data. Because Awards and Certificates rec-
ognize contemporary performance, the operating period
covered by the submitted data must begin within 14
months prior to the date of application.
• Use at least 5 percent less fuel than comparable state-of-
the-art separate heat and power generation.
To qualify for a CHP Certificate of Recognition, a project
must:
• Be in commercial operation.
• Be operating within the emission limits stipulated in their
permits.
• Demonstrate emerging technologies, fuel diversity, or new
markets for environmentally beneficial CHP.
There is no requirement for a minimum operating period or a
minimum number of operational hours, but data submitted
must be contemporary (for a period within the 14 months
preceding the application).
OVERALL
EFFICIENCY
76%
OVERALL
ENERGY STAR is a government-backed
program helping businesses and individuals
protect the environment through superior
energy efficiency. For more information on
ENERGY STAR, visit www.energystar.gov
0 EFFICIENCY
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ENERGY STAR CHP Awards & Certificates
2005 ENERGY STAR CHP Award
and CHP Certificate of Recognition Winners
EPA and DOE were pleased to present 15 ENERGY STAR CHP Awards and 13 CHP Certificates of Recognition in 2005.
Congratulations again to all of our award-winning Partners for using CHP to increase efficiency, reduce fuel use, and achieve signifi-
cant emission reduction benefits compared to separate heat and power!
2005 ENERGY STAR CHP AWARD WINNERS
Arrow Linen Supply Company (NY)
Produces 300 kW of electricity with an operating efficiency of 82%, requiring
36% less fuel and reducing C02 emissions by 650 tons per year.
Greenpark Care Center; American DG New York, LLC (NY)
Produces 140 kW of electricity, operating at 76% efficiency and using 27% less
fuel, which reduces C02 emissions by 530 tons per year.
Hermany Farms Dairy; American DG New York, LLC (NY)
Produces 210 kW of electricity and requires 21% less natural gas, operating at
an efficiency of 59% and avoiding 660 tons of C02 emissions per year.
Hexion Specialty Chemicals, Inc. (NY)
Produces 451 kW of electricity from process waste heat, resulting in C02 emis-
sions reductions of 8,300 tons per year.
Middlebury College (VT)
Produces 1.8 MW of electricity operating at 81% efficiency; using 6% less fuel,
reduces C02 emissions by 1,200 tons per year.
Mohegan Sun (CT)
Produces 400 kW of electricity, operating at 58% efficiency and requiring 26%
less fuel, eliminating emissions of 1,460 tons of C02 per year.
Rego Park Nursing Home; AES-NJ Cogen Co. Inc. (NY)
Produces 70 kW of electricity with an operating efficiency of 81%, using 32%
less fuel, and reducing C02 emissions by 330 tons per year.
St. Francis Hospital and Medical Center (CT)
Produces 200 kW of electricity with a 57% operating efficiency, reducing fuel
consumption by 25% and C02 emissions by 690 tons per year.
Sea Rise I; Bay Park I Associates (NY)
Produces 110 kW of electricity, operating at 85% efficiency and reducing fuel
consumption by 39% while eliminating 630 tons per year of C02.
Sea Rise II; Bay Park II Associates (NY)
Produces 110 kW of electricity, operating at 84% efficiency and reducing fuel
consumption by 35% while reducing C02 emissions by 570 tons per year.
ENERGYSTAR
2005 ENERGY STAR'AWARD
COMBINED HEAT AND POWER
Presented to
Your Company Here
By the United States Environmental Protection Agency and
the United States Department of Energy in recognition of the
significant pollution reduction and energy efficiency qualities
of the xxxxxx CHP project.
Awarded on xxxx
South Houston Green Power 2; Cinergy Solutions, Inc., and BP
Global Power (TX)
Produces 564 MW of electricity and 3.1 million pounds of steam per hour,
operating at 78% efficiency and using 33 percent less fuel; reduces C02 emis-
sions by 1.94 million tons per year.
University of Maryland, College Park (MD)
Produces 27.3 MW of electricity, operating at 68% efficiency and reducing fuel
use by 16%, thus avoiding the emission of 53,000 tons of C02 annually.
University of Texas at Austin (TX)
Produces 61 MW of electricity, 280,000 Ib/hr of steam, and 150,000 Ib/hr of
boiler feedwater with an operating efficiency of 60%; uses 24% less fuel and
results in 136,000 tons fewer C02 emissions per year.
Weyerhaeuser Albany Containerboard Mill (OR)
Produces 93 MW of electricity and operates at 70% efficiency, reducing fuel
consumption by 17% and by 379,000 tons of C02 emissions per year.
Weyerhaeuser Hawesville Complex (KY)
Produces 88 MW of electricity and 1 million pounds of steam per hour, while
operating at 86% efficiency; reduces fuel consumption by 23% and annual C02
emissions by 267,000 tons.
2005 CHP CERTIFICATE OF RECOGNITION
WINNERS
4C Foods CHP Project (NY)
10 West 66th Street Corporation CHP Project (NY)
30 North LaSalle CHP Project; Equity Office Properties (IL)
Beaumont Refinery CHP Project; ExxonMobil Corporation (TX)
Federal Research Center—White Oak Central Utility Plant CHP
Project; General Services Administration (MD)
Holliswood Care CHP Project; American DG New York, LLC (NY)
La Jolla Medical Center CHP Project; Department of Veterans
Affairs (CA)
Manchester Tank CHP Project; NiSource Energy Technologies (IN)
South Windsor High School CHP Project (CT)
University of Cincinnati CHP Project (OH)
Utilimaster CHP Project; NiSource Energy Technologies (IN)
Vestil Manufacturing CHP Project; NiSource Energy Technologies (IN)
Waldbaums Supermarket CHP Project; A&P Tea Company (NY)
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Strategic Market Development
As part of its broader outreach and education efforts to expand knowledge of the benefits and applications of CHP, the
Partnership is undertaking targeted efforts to increase CHP use in three specific market sectors: dry mill ethanol produc-
tion, hotels/casinos, and wastewater treatment. The Partnership's work in these sectors is intended to serve two main
audiences: energy users and industry Partners. The Partnership provides energy users with sector-specific information on the tech-
nical and economic benefits of CHP so they can consider its application at their own facilities. The Partnership provides its market
analysis, which informs these outreach efforts, to our CHP industry Partners to help increase their penetration into these sectors.
The Partnership's work in these strategic markets includes:
Evaluating the technical fit for CHP within the market sector.
• Conducting market-specific research.
• Performing outreach to sector stakeholders, including energy users, sector associations, and relevant state agencies.
• Providing project assistance to promote the installation of CHP in the sector.
The Partnership has found common elements in each of the three markets it has examined:
CHP is a strong technical fit for many facilities within the sector.
CHP is commercially available and has been proven effective in application.
CHP can be a compelling investment depending on local electricity prices and fuel costs.
• CHP offers additional values and benefits, including offset equipment costs, increased reliability, and emission reductions.
CHP has been underutilized in the market to date.
Key highlights of findings and opportunities in each of the sectors are presented below. Presenting summary financial information
for these projects is difficult, however, because each project has unique benefits and costs that must be assessed based on site-
specific factors. The CHP Partnership can share ideas or provide assistance in determining the financial success of a particular
CHP project in these markets. In addition, if you are interested in learning more about EPA's findings in these markets or have any
market intelligence or suggestions to share with EPA, please contact Kim Grossman at crossman.kim@epa.gov.
Dry Mill Ethanol Production
The Market. Dry mill ethanol production is the most common
method for producing ethanol by fermenting dried ground corn
to convert the starch protein to ethanol. Dry mill ethanol plants
are an excellent fit for CHP. They have large and relatively con-
stant power and steam demands, and they operate 24 hours a
day, 365 days a year The size of the electricity and steam
loads at ethanol plants closely matches the size of common-
ly available CHP technologies. Energy represents a large por-
tion of dry mill ethanol production costs, second only to the
cost of the corn used as the feedstock. Despite CHP's excellent
fit, adoption in this industry has been slow. Currently, only five
of approximately 80 operating U.S. dry mill ethanol facilities
incorporate CHP into their operations.
Currently, 95 ethanol plants are operating in the United
States, with 40 new plants or expansions under construction
and many more proposed. The industry produced 3.4 billion
gallons of ethanol in 2004, and the Renewable Fuels
Standard will help provide a market for nearly 8 billion gal-
lons by 2012. The industry is expected to invest an estimat-
ed $6 billion to build 4.3 billion gallons of new ethanol
capacity by 2012 to meet this growing demand.
As the market adjusts to meet this projected growth, the size
and location of new dry mill ethanol plants are changing—
from the current typical profile of 15 million to 50 million gal-
lon per year (mmgy) plants located in the Midwest to new 100
mmgy plants sited not only in the Midwest, but also in the
Northeast and California, where ethanol demand is concentrat-
ed. These market shifts and available financial incentives are
making CHP an economical choice for new facility construction
and fuel production.
Technical Fit. Current dry mill ethanol plants typically have
production capacities ranging from 15 to 50 mmgy. Power
demand ranges from 2 to 6 MW and typical steam use is
40,000 to 150,000 Ib/hr. A variety of CHP system options are
available for dry mill ethanol facilities, including gas turbines
with and without supplemental firing and boiler/steam turbine
systems. In addition to these more traditional applications, bio-
mass-fueled systems are being considered that use distillers
dried grains with solubles (DDGS—a byproduct of the ethanol
production process) or agricultural or forest waste fuels.
Integrated volatile organic chemical (VOC) destruction can
provide a low-cost solution for reducing VOC emissions from
distilled grain solids dryers and increase the benefit of CHP.
Options for integrating VOC destruction into a CHP system
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Strategic Market Development
include producing power with steam recovered from convention-
al thermal oxidizers or incorporating VOC destruction in gas tur-
bine or boiler/steam turbine systems.
Strategic Issues. Challenges to implementing CHP at ethanol
plants include the ethanol production industry's general unfamil-
iarity with CHP; concerns about cost (e.g., lack of capital, rising
natural gas prices); and questions about permitting. In response,
the Partnership is working to raise awareness of the benefits of
CHP and the successful track record of CHP technologies within
the industry and in similar production processes.
Some ethanol developers have expressed concerns that adding
CHP to their projects will slow down their fast-tracked project
schedules by complicating the permitting process or by push-
ing the facility past the Major Source threshold. The
Partnership has engaged ethanol developers, ethanol propo-
nents, and the air permitting community to increase their
knowledge of CHP technologies and emissions, and encourage
them to consider CHP earlier in the planning process as a best
practice to reduce costs and improve the lifecycle environmen-
tal performance of ethanol.
Key Stakeholders. The Partnership has conducted a variety of
outreach and support activities to engage critical stakeholders in
the ethanol industry, including project developers, facility own-
ers, equipment manufacturers, engineering firms, state energy
offices, state economic development offices, state environmental
offices, ethanol industry associations, the Governors' Ethanol
Coalition, the U.S. Department of Agriculture, DOE, and the
Midwest CHP Application Center.
Hotels/Casinos
The Market. Hotels and casinos represent an excellent, but
underutilized market for CHP. The Partnership recently complet-
ed a market study that verified the significant market potential
for CHP in the hotel and casino market, particularly in larger,
full-service facilities. While there are nearly 48,000 hotels in
the United States, about 10,000 of them have the energy
characteristics suitable for current CHP technology.
The hotel industry is currently in an upswing. However, while
revenues are increasing, costs are rising as well. Energy repre-
sents one of the few cost elements within a hotel's control.
The Partnership has chosen at this time to focus actively on
two specific industry segments—100- to 500-room hotels
located in areas of the United States that are favorable to CHP
and large casinos and resort hotels (see following text box).
Ninety-eight hotels in the United States currently have CHP sys-
tems, representing over 63 MW of capacity. California has the
most CHP-equipped hotels in the country by a large margin, with
New Jersey and New York second and third. Of the existing CHP
systems in the hotel/casino sector, the majority are reciprocating
engine systems. Many of these systems were installed during the
late 1980s. Over the past few years, however, the mix of tech-
nologies used for CHP has broadened to include microturbine,
fuel cell, and gas turbine installations.
Technical Fit. Three-quarters of the total energy needs for the
hotel industry are dictated by space heating, water heating, air
conditioning, and lighting—all of which can be met by an
appropriately designed CHP system. Given typical load profiles,
hotels on average need at least 100 rooms to support an eco-
nomically viable CHP system. Hotels in the 100 to 200 room
category can utilize a 60 to 120 kW CHP system based on
reciprocating engines or microturbines supplying hot water for
domestic hot water, space heating, and laundry needs. Larger
hotels can utilize larger CHP systems and incorporate absorp-
tion chillers to enhance thermal energy recovery and meet air
Market Differentiation
Mid-Size to Large Hotels. Hotels with 100 to 500 rooms
offer solid opportunities for incorporating standard CHP sys-
tems. They also represent the most accessible opportunities;
about 70 percent of all motel and hotel rooms are associat-
ed with franchises and national chains. The largest 15 hotel
corporations (representing 22,708 hotels) own more than
2.7 million available rooms in the United States. These large
corporations can provide centralized decisionmaking for
CHP project development or provide a centralized channel
for outreach activities to franchised operations.
Resort Casinos. Large resort hotels and casinos occupy
millions of square feet of building space, and their energy
use intensity per square foot is much higher than that of a
typical business hotel. In addition, they face different design
complexities and drivers compared to more standard hotel
applications. For example, constant ventilation and cooling
loads provide opportunities for larger CHP systems with
absorption cooling. Because most casinos allow smoking on
the casino floor, indoor air quality and equipment perform-
ance must be considered when engineering a design. In
addition, concerns about power reliability are prevalent with-
in this sector due to the risk of catastrophic loss of gaming
revenues. In Las Vegas, a trend towards large mixed-use
casino/commercial/condominium developments might pro-
vide opportunities for district energy applications of CHP.
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Strategic Market Development
conditioning needs. Large resort/casino complexes can support
multi-megawatt systems based on large reciprocating engines
or gas turbines.
Strategic Issues. The top national chains account for the
majority of hotel development either through new construction
or by acquiring existing facilities. Growth data for the five top
chains in the United States showed over 165,000 rooms under
development in 2004—85 percent of which is new construc-
tion. New construction, therefore, represents one of the best
opportunities for making a CHP decision under current market
conditions, although renovations also represent an opportunity
for facility upgrades.
Key Stakeholders. The Partnership will be developing its mar-
ket strategy for the hotel/casino market over the next several
months. Key to this strategy will be the involvement of stake-
holders, such as hotel owners, hotel management organiza-
tions, and the design and engineering community that services
these markets.
Wastewater Treatment
The Market. CHP is a reliable, cost-effective option for waste-
water treatment facilities that have, or are planning to install,
anaerobic digesters The biogas flow from the digester is
used as "free" fuel to generate electricity and power in a
CHP system using a turbine, microturbine, fuel cell, or
reciprocating engine. CHP offers many benefits for waste-
water treatment facilities because it:
• Produces power at a cost below retail electricity.
Displaces purchased fuels for thermal needs.
• Qualifies as a renewable fuel for green power programs.
Enhances power reliability for the plant.
Offers an opportunity to reduce greenhouse gas and other
air emissions.
Wastewater treatment facilities are vulnerable to catastrophic
events, natural disasters, and other emergencies. Because
they provide critical infrastructure for maintaining public
health and the environment, they must operate under any of
these conditions. The use of CHP as prime power source or
as backup can provide critical off-grid reliability to enable
wastewater treatment plants to continue operations in the
event of a utility failure. Furthermore, in the face of tighten-
ing local budgets, cost savings resulting from CHP opera-
tions can be redirected to other preparedness or infrastruc-
ture priorities.
Currently wastewater treatment CHP systems are in place in 23
states, representing 176 MW of capacity. California and Oregon
have the largest number of facilities.
Technical Fit. Biogas is a by-product of the anaerobic decom-
position of sludge at wastewater treatment facilities. With a CHP
system, a biogas flow rate of 300 standard cubic feet per minute
(scfm) can produce approximately 800 kilowatts (kW) of elec-
tricity along with more than 2.5 million British thermal units per
hour (MMBtu/hr) of thermal energy, which can be used for
anaerobic digester and space heating loads at the facility.
In states where electricity prices are low, using biogas directly in
boilers may be the best investment for a wastewater treatment
facility. Each wastewater treatment facility considering CHP will
need to perform its own site-specific feasibility analysis to deter-
mine potential biogas generation rates; methods to compress,
clean, and dry the biogas before combustion; and the costs and
benefits of generating onsite heat and electricity.
Strategic Issues. Biogas capture and use at landfill gas sites
have been explored for their potential eligibility for renewable
fuel credits and clean energy funding. The eligibility of the simi-
lar use of biogas from anaerobic digestion at wastewater treat-
ment facilities is emerging as a possible opportunity to claim
credits or garner additional funding for projects. The
Partnership is exploring these possibilities and would welcome
Partners' insight or input into the feasibility of such options.
In addition, some states offer financial incentives (e.g., grants,
rebates) for the production of clean onsite generation—such as
biogas-fueled CHP—that reduces peak period electricity
demand. See the Partner Resources section of the Partnership
Web site at: www.epa.gov/chp/funding_opps.htm for an up-to-
date list of states that provides such incentives.
Key Stakeholders. The Partnership is collaborating with EPA's
Office of Wastewater in the Office of Water, ENERGY STAR'S
Wastewater Treatment Facility efficiency effort, the National
Association of Clean Water Agencies (NACWA), the Water
Environment Research Foundation (WERF), New York State
Energy Research and Development Authority (NYSERDA), and
DOE's Regional Application Centers.
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Partner Accomplishments
CHP Partners provide reports to EPA annually about projects in which they are involved that are operational or in development.
Data reported by Partners through December 15, 2005 show that EPA's CHP Partners were responsible for at least 70 percent
of all CHP installations in the United States from 2001 through 2005 (Figure 1). In addition, CHP Partners were responsible for at
least 50 percent of the CHP capacity (MW) in the United States from 2001 through 2005 (Figure 2). From 2003 through 2005, 75
percent of national CHP capacity is attributable to CHP Partners!
Figure 1: Total Number of New
Installations Added per Year
2001
2002
2005
Figure S: Total New Capacity of CHP
Projects Added per Year
7,000
4,000
1,000
2001
2005
System Sizes
Of all CHP projects reported by Partners as operational
between 2001 and 2005, 83 percent have been small (less
than 2 MW in size; Figure 3). These smaller projects
account for only 1 percent of installed capacity, while 93
percent of installed capacity is attributable to the 24 largest
reported projects (greater than 50 MW; Figure 3).Of all CHP
projects reported by Partners as operational between 2001
and 2005, 83 percent have been small (less than 2 MW in
size; Figure 3). These smaller projects account for only 1
percent of installed capacity, while 93 percent of installed
capacity is attributable to the 24 largest reported projects
(greater than 50 MW; Figure 3).
8,500
Figure 3: Total Installed Projects
by Size Category C2OO1 —2OO5]
8,545 MW
370 sites
102 MW
2 - 50 MW
Size Category
24 sites
>50 MW
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Partner Accomplishments
Geographic Distribution
Based on Partner-reported CHP data, CHP systems are currently operating in 39 states. The highest concentrations of installed
CHP systems are in California, Ohio, Texas, and the northeastern states (Figure 4).
Figure 4: Number of CHP Installations by State
^ (2001-2005)
Fuel Use
Of the five most commonly installed prime movers used in
CHP systems, 87 percent are fueled with natural gas, while
13 percent are fueled with biomass (Figure 5). With less
commonly installed prime movers, there is more variety in
the fuel type used to power the system (Figure 5). Of all
operational CHP projects reported by Partners, 97 percent
of CHP capacity is fueled by natural gas with the remaining
3 percent fueled by biomass and coal (Figure 6). For proj-
ects reported as in development, at least 15 percent are pro-
jected to be fueled with biomass; however, natural gas will
still remain the predominant fuel type for CHP systems.
Figure G: Total Installed Capacity
by Fuel Type C2OO1- 2OO5)
8.946 MW
Figure S: Total Number of Installations
by Fuel and Prime Mover C2OO1 —2OO5]
n ., Condensing Backpressure
Turbine9 Turbine
Multiple
n .
*£,
Anthropogenic I
Biomass I
Natural Gas
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Partner Accomplishments
Future Development
Based on Partner-reported data through 2005, Partners expect to install almost 3,000 MW of new capacity from 2006 to 2010
(Figure 7). CHP Partners have reported a total of 385 projects in development (e.g., in construction, in engineering, or pro-
posed) for 2006 through 2010. Based on these data, a significant concentration of new installations are expected to be installed
in states that actively promote the development of CHP as a means to support their clean energy goals, such as California,
Texas, New Jersey, and New York (Figure 8).
Figure 7: Projected Growth in Number of CHP Installations
by State (2006-2010)
/-
Figure 8: Projected Growth in CHP Capacity (MW)
^
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Partner Focus
CHP Equipment Manufacturers Stay
Ahead of the Curve in Emissions
Performance
In keeping with nationwide trends towards stricter air emis-
sions requirements, CHP equipment manufacturers, many
of which are EPA CHP Partners, are making CHP an even
more environmentally friendly option for supplying reliable
onsite electricity and thermal energy.
On January 1, 2007, the California Air Resources Board's
(GARB) most stringent air quality emissions requirements for
distributed generation will go into effect. These standards
decrease allowable nitrogen oxides (NOX), carbon monoxide
(CO), and volatile organic compound (VOC) emissions by more
than a factor of 10 below 2003 standards (from 0.7 Ibs/MWh to
0.07 Ibs/MWh for NOX; from 6.0 Ibs/MWh to 0.1 Ibs/MWh for
CO; and from 1.0 Ibs/MWh to 0.02 Ibs/MWh for VOCs).
In addition, in March 2005, EPA issued the Clean Air Interstate
Rule (CAIR), a rule that will achieve the largest reduction in air
pollution in more than a decade. CAIR will permanently cap
emissions of sulfur dioxide (S02) and NOX across 28 eastern
states and the District of Columbia. When fully implemented,
CAIR will reduce S02 emissions in these states by over 70 per-
cent and NOX emissions by over 60 percent from 2003 levels.
States are required to submit their implementation plans to EPA
in September 2006 and are likely to require stricter limits on air
emissions from a variety of sources, including facilities inclined
to install distributed generation (DG) in the process of meeting
their CAIR requirements.
In anticipation of continuing limits on air emissions, multiple
equipment manufacturers have recently been producing CHP
equipment to help energy users meet the nation's most strin-
gent air quality emissions requirements. These advances
should further enhance the emissions benefits gained through
the use of CHP in place of separate heat and power and also
help streamline the permitting process for CHP projects.
In 2005, equipment manufactured by two CHP Partners—
FuelCell Energy and Ingersoll-Rand Energy Systems—became
state-certified to meet CARB's stringent new DG emissions
standards for 2007.* Another Partner—Solar Turbines—
began shipping its first full production model of a guaranteed
low-emissions-profile turbine.
Sierra Nevada Brewery, Chico, California. The 1-MW installation con-
sists of four 250 kW Direct FuelCell® power plants from FuelCell
Energy, which are classified as an Ultra-Clean technology under
California law.
In November 2005, Ingersoll-Rand's 250 kW microturbine sys-
tem became the first and, to date, the only microturbine to be
certified under the GARB 2007 emissions standards. In
December 2005, FuelCell Energy's modular 250 kW Direct
FuelCell® power plant also received GARB 2007 certification,
making it the third FuelCell Energy product to qualify under
CARB's standards. The company's 250 kW DFC300A power
plant was certified under GARB 2007 standards in May 2003,
and its 1 MW class DFC1500 power plant was certified under
the standard in September 2004.
In the larger class size, the Mercury 50, manufactured by Solar
Turbines, is a 4.6 MW recuperated gas turbine that began com-
mercial production this year. The Mercury 50 turbine was ini-
tially developed under DOE's Advanced Turbine Systems (ATS)
program, which ran from 1992 to 2000. The ATS program set
out to create a product smaller than 20 MW with NOX emis-
sions lower than 8 ppm and with a 15 percent improvement in
thermal efficiency over conventional gas turbines, all while
maintaining a high level of reliability, availability, maintainability,
and durability. Using Solar's ultra lean premix combustion sys-
tem, the Mercury 50 is guaranteed to emit less than 5 ppm
NOX, 10 ppm CO, and 10 ppm unburned hydrocarbons without
using supplemental emission reduction equipment or urea.
*The GARB 2007 emissions standards classify electric generation technologies as "ultra-clean and low-emission distributed generation" if they
produce zero emissions during their operation or produce emissions equal to or less than levels established by the GARB. The GARB 2007 emis-
sions standards are 0.07 Ib/MWh NOX, 0.10 Ib/MWh CO, and 0.02 Ib/MWh VOCs, with a credit of one Ib/MWh for each 3.4 million Btu of heat
recovered. To meet the new GARB 2007 emission standards, natural gas-fueled DG technologies (such as fuel cells, reciprocating engine-driven
generators, and microturbines) must successfully pass a set of emissions limits comparable to the Best Available Control Technology (BACT)
standards used in larger and more advanced central power plants. After January 1, 2007, only DG technologies that successfully meet the GARB
2007 emissions standards may be sold in California in areas where site permits are not required.
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Partner Focus
University of Cincinnati central plant, Cincinnati, Ohio
University of Cincinnati Continues
10 Years of Energy Leadership with
Its CHP Central Plant
As part of its 10-year effort to reduce energy consump-
tion, increase reliability, and create an environmentally
friendly operation, the University of Cincinnati installed
a 46 MW CHP system at its central plant in 2004. University
energy managers also considered other options, such as
installing independent boilers while purchasing all of its elec-
tricity from the local utility, which uses primarily coal-fired gen-
eration. Although the initial investment in CHP was more
expensive, the university selected the CHP plant because it
would prove more cost-effective in the long run (i.e., over a 20-
year time period), was more environmentally friendly, and
would provide greater reliability than conventional separate
heat and power.
The CHP plant is designed to operate independently of the elec-
tric grid, which enables the university to maintain power for its
33,000 students, research laboratories, facilities, and hospitals
in the event of a disaster or utility failure. The university is the
largest employer in Cincinnati and the provider of energy to six
hospitals; therefore, the reliability provided by the new CHP
system is critical. The university even took the unprecedented
step of simulating a large-scale blackout by completely discon-
necting from the utility grid and starting its entire CHP system
one breaker at a time, as a test of its ability. "Folks were
extremely skeptical about testing the CHP system in simulated
blackout conditions, because if anything went wrong, we could
have been in big trouble," said Joe Harrel, Director of Utility
Operations. "However, I was confident enough in the system
that we went ahead, and within just an hour-and-a-half, the
entire campus was up and running again."
The university's CHP plant operates at approximately 70 per-
cent efficiency and uses approximately 22 percent less fuel
than equivalent separate heat and power. Using the continuous
emission monitoring data the university provided, 2000 EGRID
emission data for the state of Ohio, and estimated emissions
from a displaced coal-fired boiler, the Partnership calculates
that the University's 46 MW CHP system reduces annual C02
and NOX emissions by 56 percent and 86 percent, respectively,
from a business-as-usual scenario. These C02 savings are
equivalent to removing the emissions of over 13,000 cars from
the road each year.
"The CHP Certificate of Recognition
from EPA was one of the best awards
we could have received—it really rein-
forced our conviction that we'd done
the right thing by opting for this
extremely clean technology rather
than the alternatives."
Everett Wolverton
Associate Vice President of
Administrative and Business Services
In October 2005, the Partnership recognized the considerable
pollution reduction and energy efficiency qualities of this proj-
ect by presenting the university with a 2005 CHP Certificate of
Recognition.
For more information on the CHP plant or other energy-saving
measures in place at the university, please contact Joe Harrell,
Director of Utility Operations, University of Cincinnati, at
harreljh@ucmail. uc. edu.
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Partner Focus
New Jersey Clean Energy CHP
Program Announces Second Round
of Funding Awards
The New Jersey Clean Energy Program (NJ CEP) recently
announced its selection of 10 new CHP projects that will
receive funding under its 2005 CHP incentive program.
Following evaluation of the 26 projects submitted for consider-
ation, NJ CEP awarded a total of $7,443,370 to the 10 selected
projects. These newly funded projects are expected to con-
tribute 18 MW of capacity to New Jersey's clean DG portfolio
and to spur the growth of CHP markets and technologies
throughout the state.
The mission of the NJ CEP, which is administered by the New
Jersey Board of Public Utilities (BPU), is to use energy efficien-
cy and clean DG to provide reliable, environmentally beneficial
energy solutions for New Jersey. Members of the CHP Program
development team established the following key goals for the
CHP Program, as a viable component of a strategic energy sav-
ings plan:
• Increase energy efficiency
• Reduce overall system peak demand
• Encourage the use of emerging technologies
The development of the CHP Program was the result of a posi-
tive, collaborative effort involving a host of nontraditional allies.
With the support and guidance of Michael Winka, Director of
BPU's Office of Clean Energy (OCE), and Mona Mosser, Chief of
OCE's Bureau of Energy Efficiency, the program received regu-
latory approval in 2005. The program's operational initiatives
were led by Ms. Mosser and Bruce Grossman of South Jersey
Gas, with significant effort and participation from the New
Jersey Department of Environmental Protection, Rutgers
University, New Jersey Natural Gas, Elizabethtown Gas, Public
"We created this new initiative to help
reduce greenhouse gases, create jobs,
and reduce stress on the power grid."
Mike Winka
Director of NJ BPU Office of Clean Energy
Service Electric and Gas, and the EPA CHP Partnership. Bruce
Grossman, Manager of Energy Programs at South Jersey Gas,
commented on the team and its efforts, stating, "We got results
within one year through working with a national agency, two
state agencies, a public university, and four utilities. This was a
dedicated team!"
By involving a broad diversity of organizations in the CHP
Program's development, NJ CEP enabled stakeholders to
address cross-functional barriers to CHP deployment, ensuring
the development of a solid system of incentives for encourag-
ing customers to move forward with CHP. Over the course of
one year, the multi-faceted team designed, created, and imple-
mented a CHP program complete with two rounds of funding
solicitations (in June 2004 and June 2005).
The CHP Program gives qualifying customers, contractors, and
energy service companies incentives to purchase and install
various types of CHP units. To qualify, a customer's facility
must be located in New Jersey, purchase electricity from the
utility grid, and be an electric or gas customer on an eligible
tariff. Incentives are paid out up to 1 MW of capacity at differ-
ent $/watt levels, depending on the technology used.
For more information about the program and the 2006
solicitation, which will be open from April 17, 2006 through
June 30, 2006, see www.njcleanenergy.com/html/Combined/
combined.html.
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Policy Highlights
New Connecticut Energy Legislation
Aims to Increase CHP
In June 2005, the Connecticut legislature passed the "Act
Concerning Energy Independence" (HB-7501), which con-
tains numerous provisions to increase DG (including CHP)
and energy efficiency. A key goal of this omnibus state energy
package is to reduce the hundreds of millions of dollars in new
federally mandated congestion charges (FMCC) that
Connecticut ratepayers are facing, particularly in the southwest-
ern portion of the state. Provisions of the energy legislation that
represent positive developments for CHP are highlighted below.
A new efficiency and CHP portfolio standard requires
standard offer and competitive electric suppliers to obtain
mandated percentages of their output from Class III
resources. Suppliers must obtain 1 percent by January 1,
2007, and an additional 1 percent every year thereafter, up
to 4 percent by January 1, 2010.
"Building new transmission lines alone
isn't going to solve the problem."
Chris James, Director
Air Planning, Connecticut Department
of Environmental Protection
Class III resources include CHP generation and energy
conservation services. CHP qualifies if it has an operating
efficiency no less than 50 percent, is sited at a commercial
or industrial end-user's facility, and is developed on or after
January 1, 2006. Alternately, electricity savings created at
commercial or industrial facilities from conservation and
load management programs also qualify as a Class III
resource.
Customer-sited distributed resources that use natural
gas will be eligible for a rebate of gas delivery charges from
the electric distribution company.
Customer-sited distributed resources are exempt from
back-up power rates, provided that the resource is avail-
able during system peak periods and the system capacity is
less than the customer's maximum metered peak load.
• Customer-sited distributed resources include (a) genera-
tion of electricity from a unit with a rating of not more than
65 MW on the premise of a retail end-user within the trans-
mission and distribution system or (b) a reduction in the
demand for electricity on the premises of a retail end-user
in the distribution system through methods of conservation
and load management, including, but not limited to, peak
reduction systems and demand response systems.
Long-term financing will be available for customer-sited
DG and advanced monitoring and metering equipment
purchased or leased by customers of electric distribution
companies. The Connecticut Department of Public Utility
Control (CT DPUC) has not yet designated the entity that
will be responsible for implementing financing. Preference
for financing will be given to projects and metering equip-
ment that reduce FMCC.
• Utilities may receive a one-time, non-recurring award
(i.e., a "capacity grant") of $200/kW in 2008, declining by
$50/year through 2011, to educate, assist, and promote
investments in customer-sited DG that reduce FMCC.
The CT DPUC will continue to work on finalizing the details
of many of these provisions through early 2006. To view the
status and content of the CT DPUC's decisions, visit
www.state.ct.us/dpuc and search the active docket database
for dockets 05-07-14 through 05-07-21.
For the full text of the bill, visit www.cga.ct.gov/2005/TOB/h/
pdf/2005HB-07501-ROO-HB.pdf.
Beginning in 2006, the CHP Partnership will provide one-on-one assistance to states interested in policies that significantly
impact CHP, including interconnection standards, standby rates, and CHP as an eligible RPS resource. If you have state policy
interests, please contact Katrina Pielli to discuss.
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Policy Highlights
Pennsylvania Alternative Energy
Portfolio Standard Includes CHP
Pennsylvania's new Alternative Energy Portfolio Standard
(AEPS) requires that 18 percent of Pennsylvania's ener-
gy resources come from alternative sources by 2020.
The first 10 percent must come from Tier II resources, which
include waste coal, DG systems (including CHP), demand-side
management, large-scale hydropower, municipal solid waste,
byproducts of wood-pulping and manufacturing, integrated
combined coal-gasification technology, and energy efficiency.
The other 8 percent must be derived from Tier I resources,
which include wind, photovoltaics, solar thermal, low-impact
hydropower, geothermal, biomass, fuel cells, coal bed methane,
and biological methane Depending on the fuel used, CHP
could qualify under either tier of the AEPS requirements.
The AEPS took effect on February 28, 2005 and applies to both
electric distribution companies and electric generation suppliers.
During the first compliance year (June 1, 2006 through May 31,
2007), 5.7 percent of the total fuel mix sold by utilities and retail
marketers in Pennsylvania must be derived from alternative
sources, as defined in the AEPS. The law establishes alternative
compliance payments of $45 per alternative energy credit for
non-compliance. An alternative energy credit is 1 megawatt hour
(MWh) of alternative energy generated or 1 MWh conserved
from demand-side management or energy efficiency.
The Public Utility Commission (PUC) designated demand side
management and energy efficiency standards in September
2005. The standards include:
• A catalog approach for standard energy savings measures
that are readily available (e.g., energy-efficient appliances,
light bulbs, heating and air-conditioning equipment).
• Custom or metered measures for DG or atypical systems.
Metered measures will apply to DG (including CHP) where
the value of generator output can be directly measured.
In addition to requirements for utilities, the Act provides for
interconnection and net metering of DG resources up to 50 kW
for residents and 1 MW (or up to 2 MW under certain condi-
tions) for others. The PUC has outlined universal review proce-
dures for the electric distribution companies to follow in evaluat-
ing potentially interconnected systems. Net metering will be
credited throughout the year in which it occurred at the full retail
rate for the billing period; at the end of the year, net metering
payments will be made at the utility's avoided cost. A net meter-
ing customer owns the alternative energy credits of the electrici-
ty it generates unless the contract specifies otherwise.
The AEPS provides an opportunity for an additional income
stream for CHP projects in Pennsylvania. The development of
interconnection and net metering standards should further
facilitate project implementation through reduced uncertainty
around timelines, fees, and technical requirements.
For more information on the PA AEPS and its implementation,
please see www.puc.state.pa.us/electric/
electric_aeps_working_groups.aspx.
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Policy Highlights
Alternative Language for Clean Air
Interstate Rule Provides Improved
Treatment for CHP
• n August 2005, the State
and Territorial Air Pollution
I Program Administrators
(STAPPA) and the Association
of Local Air Pollution Control
Officials (ALAPCO) released the
publication Alternative NOX
Allowance Allocation Language
for the Clean Air Interstate
Rule. This document provides
suggested language for helping
states meet Clean Air Interstate
Rule requirements while
encouraging the use of clean technologies by promoting CHP,
end-use efficiency, renewables, or lower-emitting technologies.
The Clean Air Interstate Rule requires states in the eastern
United States to revise their state implementation plans (SIPs)
to address continuing nonattainment of the ozone and PM2.5
ambient air standards. If states choose to achieve S02 and/or
NOX reductions through regional emission cap and trade pro-
grams, they must adopt rules to regulate their emission trading
programs. While EPA does provide states with model allocation
language for NOX, states have broad flexibility to design their
NOX allocation systems, leaving the door open to improved
treatment of CHP and other clean technologies.
STAPPA/ALAPCO's document provides options for designing
the NOX allocation system, including:
• Output-based allocation
• Improved treatment of CHP
• Fuel-neutral allocation
• Updating the allocation baseline each time allowances are
reallocated
• Reduced allocation lead time to bring new units in faster
• Increased new source set-aside
• Energy efficiency/renewable set-aside
• Direct allocation to renewables/energy efficiency
• Reduction of NOX cap
Specific regulatory language that states can adopt directly or
use as the basis for state-specific alternatives is provided in the
attachments of the Alternative NOX Allowance Allocation
Language for the Clean Air Interstate Rule, found at
www.4cleanair.org/PublicationDetails.asp.
To learn more about the Partnership's work on output-based
emissions standards, contact Tom Frankiewicz.
Clean Air Interstate Rule States
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Tools You Can Use
Funding and Regulatory/Rates
Database
As an expanded service to our Partners, the CHP Partnership
Web site now provides a regularly updated list of CHP and bio-
mass/biogas funding opportunities, along with utility rates and
environmental regulations that are beneficial for project devel-
opment. This feature of the Web site includes:
• State and federal CHP incentives
• State and federal biomass/biogas incentives
• Utility, state utility commission, and state environmental
agency rules and regulations that remove unintended barri-
ers to clean DG projects
The Partnership updates this information twice a month on the
Partner Resources section of the Web site: www.epa.gov/chp/
funding_opps.htm. You may want to bookmark the site!
CHP Project Development Process Tools
The Partnership has created a new tool to help energy users
become CHP champions by understanding, navigating and
streamlining CHP project development at their facility. The CHP
project development process section of the website provides an
introduction (e.g., purposes, outcomes, goals, effort, and
costs) to the phases of project development and includes tools
and resources to help energy users collect the information they
need to make educated decisions.
• The Level 1 Data Tool helps energy users collect informa-
tion they will need to conduct or have someone perform a
Level 1 (i.e., screening-level) feasibility analysis at their site.
It helps users collect information about facility operations,
existing utility bills and costs, and critical electric and ther-
mal energy requirements and load profiles.
• The Level 2 Feasibility Study Overview and Checklist pro-
vides an introduction to the elements of a Level 2 CHP fea-
sibility study—an engineering study using verified data to
determine optimal system design and pricing. It includes a
checklist for energy users who are considering implement-
ing CHP at their facilities. The tool helps users:
• Develop the scope for the procurement of a Level 2 fea-
sibility study
• Review the results of a Level 2 feasibility study for com-
pleteness
These tools and others are available in the CHP Project
Resources page of the Partnership Web site at www.epa.gov/
chp/project_resources/proj_dev_process.htm.
CHP Emissions Calculator
The CHP Emissions Calculator is a tool that compares the
anticipated emissions from a CHP system to the emissions
from systems using separate heat and power generation. A
user can select from a large number of different separate heat
and power system profiles, compare them to a CHP system,
and estimate the NOX, S02, and C02 emission reductions
achieved by the CHP system. In developing the calculator, the
CHP Partnership hopes to help CHP end-users and other inter-
ested parties calculate the emissions attributable to their CHP
projects. The Emissions Calculator (and corresponding user
manual) will be available in early 2006 on the CHP Project
Resources section of the Web site at www.epa.gov/chp/
project_resources. htm.
Clean Energy Environment Guide
to Action Fact Sheets
The Partnership has developed five new fact sheets about poli-
cies and programs that state policymakers can use to support
clean energy, including CHP and clean DG. These new fact
sheets include Renewable Portfolio Standards, State Clean
Energy Funds, Interconnection Standards, Utility Rates, and
Output-based Regulations. They will serve as companions to
full chapters of EPA's forthcoming Clean Energy-Environment
Guide to Action, to be released on February 6, 2006. Each fact
sheet includes brief discussions of the benefits, key features,
and suggestions for successful approaches for each policy,
along with state examples and resources for more information.
These may be useful as you speak to your state policymakers
about the benefits of increasing CHP in your state. They can be
found on the State Resources page of the Web site at
www. epa.gov/chp/ state_resources. htm.
STAGE 2 STAGE 3
Level 1 Level 2
Feasibility Analysis Feasibility Analysis
The CHP Project Develoment Process
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New Partners
Our Newest Partners
T
he CHP Partnership extends a warm welcome to the following 33 Partners who joined in 2005. To learn more about
these and all our Partners, visit the Our Partners page of our Web site at: www.epa.gov/chp/chp_partners.htm.
Alliant Energy Generation
AmericanDG Energy, Inc.
Arizona State University
Benz Air Engineering Company
Burns & Roe Enterprises, Inc.
Chevron Energy Solutions
City of Palo Alto Utilities
CMC-Engineering
Connecticut Natural Gas
Corporation/Southern Connecticut Gas
Cornell University
Distributed Generation Solutions
Electrotechnology Applications Center
EME, LLC
Harvest Energy Ltd.
Intrinergy, LLC
Johnson & Johnson
LightRidge Resources, LLC
MECS, Inc.
New York Presbyterian Hospital
Northwind Phoenix, LLC
Pan American Power Solutions
Powerhouse Energy
PPL SavageALERT, Inc.
RDA Engineering
Renova Energy, Inc.
Sacramento Municipal Utility District
(SMUD)
Shafer, Kline & Warren, Inc.
Southwest Suburban Sewer District
Tecogen, Inc.
University of Cincinnati
UTC Power
Waldron Engineering & Construction, Inc.
WaterSmart Environmental, Inc.
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CHP
£EPA COMBINED HEAT AND
POWER PARTNERSHIP
www.epa.gov/chp
U.S. Environmental Protection Agency
Office of Air and Radiation
1200 Pennsylvania Ave, NW
(MC 6202J)
Washington, DC 20460
EPA-430-R-06-008
March 2006
Recycled/Recyclable—Printed with vegetable oil based inks on 100% postconsumer, process chlorine free recycled paper.
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