Cogeneration and On-Site Utility (PPA): Definition and Benefits

Cogeneration and On-Site Utility (PPA): Definition and Benefits

• 1.
  NOW is aGreat Time for NY & NJ to look at Cogeneration
• 2.
  Why Cogeneration? Power Reliability& Cost Savings
• 8.
  Why Cogeneration? •  UtilitySubstation Security Issues/Expenses •  Weather Concerns and Power Stability is a Going Concern •  Utility cannot keep up with Demand – Recession Over •  NYC & NJ population growing rapidly •  Utility Companies will not build new power plants •  Coal & Nuclear Power Plants Closing •  Indian Point 2016 - 30% of Utility Supply •  Increasing Utility Company Expenses – Natural Gas Infrastructure •  Marcellus Shale Formation – Long Term Natural Gas Abundance •  Substantial Government Incentives - CHP Partnership Goal
• 10.
  What Is Cogeneration?
• 11.
  Simultaneous Production ofHeat & Electricity
• 12.
  Why Invest inCogeneration? According to the U.S. Dept. of Energy, “High Rise Residential Buildings & Hospitals can be ideal candidates for combined heat and power (CHP/ Cogeneration) systems. Many require high volumes of thermal energy by way of hot water, steam, and/or chilling, require round the clock energy, and have a strong need for backup/standby power in the event of a blackout. CHP systems enable buildings to reduce energy costs, improve environmental performance, and increase energy reliability.”
• 13.
  Benefits of Cogeneration? • Reduces the Risk of Power Outages – Provides On-Site Reliable Standby Power with Black start Capability •  Reduce Energy Costs by 40-60% •  Reduces Peak Demand Charges •  Provides a Long-Term Physical Hedge Against Rising Utility Costs •  Improves Power Quality •  Extends Equipment Life of Surrounding Equipment •  Substantial Federal & State Incentives •  Green Initiative – Low Emissions •  Immediate Positive Cash Flow & Quick ROI in Most Cases
• 14.
  Does My Building Qualifyfor Cogen?
• 15.
  Qualify for Cogeneration? • Do you pay more than $.08/ kWh on average for electricity (including generation, transmission and distribution)? •  Are you concerned about the impact of current or future energy costs on your business/ property? •  Are you concerned about power reliability? Is there a substantial financial impact to your business/property if the power goes out for 1 hour? For 5 minutes? •  Does your facility operate for more than 5000 hours/ year? •  Do you have thermal loads throughout the year (including steam, hot water, chilled water, hot air, etc.)? •  Does your facility have an existing central plant? •  Do you expect to replace, upgrade or retrofit central plant equipment within the next 3-5 years? •  Do you anticipate a facility expansion or new construction project within the next 3-5 years? •  Have you already implemented energy efficiency measures and still have high energy costs? •  Are you interested in reducing your facility’s impact on the environment?
• 16.
  Power Purchase Agreement On-Site Utility
• 17.
  •  No expenditureof capital •  No investment or budget required •  No financing required •  Off balance sheet •  Your cash flow is improved •  No operating or maintenance costs or concerns •  Guaranteed Energy Savings for Long Term •  Standby / Blackout Power •  Cleaner, More Reliable Power & Extended Equipment Life (Boilers & Chillers & Motors) •  Green Benefits Summary of On-Site Utility Benefits
• 18.
  Who Should ConsiderA PPA? •  Not For Profit Entities •  Home Owners Associations – Condo’s & Coops •  Buildings who want to Preserve Capital •  Buildings who need to replace old boilers & chillers •  Building Developers
• 19.
  •  PPA CompanyInstalls a Cogeneration System on your Property at No Expense to you •  This system is now your On-Site Utility Plant, owned and operated by the PPA company •  You are required to purchase all of the electrical and thermal energy the system produces – usually Electricity & Domestic Hot Water & Chilled Water for centrally chilled buildings through absorption chillers •  All energy purchased is at a guaranteed discounted rate of 5-15% •  PPA Term is usually 10-15 years •  PPA company pays for all natural gas to fuel the system •  PPA company pays for all operation and maintenance and monitoring of the system Typical PPA Structure
• 20.
  End User +Developer + Investor •  All have a common interest in the CHP running all the time and at peak efficiencies Interests Are Aligned with PPA
• 21.
  Thank You