Heat + Power 

Combined heat and power (CHP) systems, also known as cogeneration systems, have done more than just produce energy and cost savings for WinnResidential. Having invested in 16 CHP systems, WinnResidential has also taken a significant step in reducing its carbon footprint while improving its bottom line.

CHP is the simultaneous production of electricity and heat from a single fuel source, in this case natural gas. These systems use an engine to turn a generator producing electricity and usable heat more effectively. (See “How CHP Works,” below).

Jim Harger, Vice President of WinnDevelopment, first learned of CHP in 1992. While researching energy saving technologies at that time, Harger considered partnering with Aegis Energy Services of Holyoke, Mass., to install a CHP system in each of the three buildings at the 307-unit The Village at Brookline in Brookline, Mass.

Reluctant to invest capital initially, Winn agreed on a shared savings agreement proposed by Aegis, whereby Aegis would install, own and operate the three systems at no expense to Winn. The Village at Brookline was only obligated to purchase its electricity, heat and hot water, produced by Aegis’ installations, at an agreed-upon discount to current market rates. The systems were installed at no cost to Winn.

Winn’s latest effort involves purchasing a system for a 250-unit community in Worcester, Mass. For the $225,000 system, it received a $56,000 grant from the utility. It is a one-time grant, paid when the equipment is installed and operational. Winn expects to realize a net savings of $36,000 annually, according to estimates by WinnDevelopment’s Vice President of Energy and Sustainability Darien Crimmin and Aegis.

Not all states offer such grants (Winn also received them in Connecticut). Investment in these systems pays for itself in about six years, Crimmin says. It takes just five years or less to recoup investment costs in states with credits available, he says.

With proper routine and preventive maintenance, the systems have shown to work effectively for at least 25 years, manufacturers say.

Building the Case

CHP systems such as Winn’s, manufactured by Aegis, work ideally in areas with high electric rates and in buildings with central hot water boiler systems and high thermal demand.

CHP is ideal for buildings that use hot water for space heating in the winter and domestic hot water (DHW) year-round. Buildings such as offices or retail can potentially be candidates for CHP based on how much hot water they use. CHP systems typically are financially attractive in apartment buildings with 100 or more units. Because of high electric costs, CHP systems provide great savings in the Northeast, according to Aegis.

A property considering a CHP system ideally should have natural gas onsite and a suitable location to place the equipment that is near the main boiler room and electric meters, Crimmin adds. The existing electric and hot water demands of the building will also determine whether CHP is applicable, he says.

“For properties with smaller loads (less than 50 units), a large CHP could produce too much heat or too much electricity, which may reduce its efficiency and cost effectiveness,” Crimmin says. “Manufacturers and installers, such as Aegis, have engineering support to size the appropriate equipment that meets the demands of the community. And as the technology continues to evolve, small-scale cogeneration equipment is entering the market and may be able to serve smaller properties.”

As a reference, Crimmin says that Winn typically installs 75kW modules.

Cost-Saving ‘Engines’

It is often wise to invest available capital expenditure dollars to buy, rather than lease, a CHP system, Crimmin says. If money is tight, he says, there are options to finance it through a separate power purchase agreement. He also recommends entering into a maintenance agreement with the manufacturer.

“These systems are like big automobile engines; they have to be regularly serviced every few years to maintain high run times and maximize savings,” Crimmin says. “Our maintenance technicians don’t touch them. We have the manufacturer perform and track the maintenance.”

Crimmin also recommends that communities conduct ongoing appraisals of the systems, looking for additional ways to improve their operation. For example, Winn is adding more volume to its hot-water storage tanks so that they become more efficient, especially during high-use times such as mornings and evenings.

“The extra storage area helps to cut down on the amount of time the boiler needs to be on to heat the tanks,” Crimmin says, “helping to make the entire system run more effectively.”

Companies interested in these systems should consult with their natural gas utility companies, Crimmin suggests, so that they are up-to-date on the various requirements that are being applied to state rebate or tax credit offerings. He says manufacturers such as Aegis continue to work to improve the systems, making them an option for a wider range of apartment types.

Paul R. Bergeron III is NAA’s Director of Communications. He can be reached at 703/797-0606 or paul@naahq.org.

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How CHP Works

All power plants must emit a certain amount of heat during electricity generation. This heat is often released into various bodies of water or through cooling towers, flue gas or by other means. By contrast, CHP captures some or all of the by-product heat for space or domestic hot-water heating purposes. In most large power plants, two-thirds of the thermal energy is lost. In contrast, onsite CHP uses heat normally wasted, potentially reaching efficiencies of 85 percent, compared with 35 percent for the best conventional plants. This means that less fuel needs to be consumed to produce the same amount of useful energy.

Source: Aegis

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