Thoughts on CHP and Efficiency

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Sterling Energy has lead the evaluation of ways to bring greater collaboration between utilities and their large, high load factor customers with continuous thermal loads in the development of utility-owned combined Heating and Power (CHP or Cogeneration as many call it). Through this collaborative approach to drive efficiency, Sterling Energy has been the leading advocate and advisor to help bring utilities and their high load factor customers with continuous thermal loads together to add value on both sides of the meter.

CHP is the most efficient method of generating power on the planet and now utilities and their key customers who have continuous thermal loads are collaborating to realize the enormous efficiency benefits of CHP which serves as (1) a low cost based load supply asset for the utility and (2) a source of efficient and reliable steam and thermal energy supply for the utility customer /host. Collaboration on CHP projects produce a wide range of values for utilities, their host customers, and all customers. CHP benefits include:

Lowest Net Heat Rates
- For properly applied sites, CHP can provide the lowest net heat rates and net levelized cost of energy to serve the load
Transmission & Distribution Benefits
- CHP avoids T&D losses by supplying power at the source of load
- There is also potential avoidance or deferral of future capital investments for congested T&D feeders – can support compliance with new FERC 1000 regulations (site specific)
Reduced Environmental Footprint
- CHP can provide lower emissions per MWh (NOx, SOx, CO2) & zero water use
Greater Resiliancy & Reliability
- Improved resiliency of electric and thermal supply for host customers, and all customers – can supply power to site from CHP even when grid is down
More Flexibility & Less Risky Development
- CHP is developed in smaller increments than traditional generation and in much shorter cycles (as little as 24 months from planning/evaluation to in-service). CHP enables total capacity to more closely reflect (uncertain) load growth with much lower carrying costs / risk.
Can provide for industrial development and expansion of key customer sites, more local jobs, and tax base
- Expanding the electric and thermal energy infrastructure at a customer’s plant serving as a steam host has been proven to support plant expansion plans and increased jobs and local tax base
Improving Reliability and Competitiveness of Large, High Load Factor Customers
- Providing additional steam supply and ability to ‘island’ with the CHP at major customer sites serving as ‘steam hosts’ provides increased thermal and electric system reliability – which means less downtime and more production and plant income. It also provides infrastructure modernization & efficiency improvements at the site (without capital investment) leading to more competitive steam, hot water, and cooling supply which also improves customer profitability
- Reliability, reliability, reliability means less down-time (forced and scheduled) increasing production / service hours & lower costs all helping marginal plants be more competitive

Thoughts on CHP and Efficiency

Lowest Net Heat Rates

For properly applied sites, CHP can provide the lowest net heat rates and net levelized cost of energy to serve the load

Transmission & Distribution Benefits

CHP avoids T&D losses by supplying power at the source of load

There is also potential avoidance or deferral of future capital investments for congested T&D feeders – can support compliance with new FERC 1000 regulations (site specific)

Reduced Environmental Footprint

CHP can provide lower emissions per MWh (NOx, SOx, CO2) & zero water use

Greater Resiliancy & Reliability

Improved resiliency of electric and thermal supply for host customers, and all customers – can supply power to site from CHP even when grid is down

More Flexibility & Less Risky Development

CHP is developed in smaller increments than traditional generation and in much shorter cycles (as little as 24 months from planning/evaluation to in-service). CHP enables total capacity to more closely reflect (uncertain) load growth with much lower carrying costs / risk.

Can provide for industrial development and expansion of key customer sites, more local jobs, and tax base

Expanding the electric and thermal energy infrastructure at a customer’s plant serving as a steam host has been proven to support plant expansion plans and increased jobs and local tax base

Improving Reliability and Competitiveness of Large, High Load Factor Customers

Reliability, reliability, reliability means less down-time (forced and scheduled) increasing production / service hours & lower costs all helping marginal plants be more competitive