mCHP in North America Promise, Progress

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mCHP in North AmericaPromise, Progress
Obstacles

• Dr. Samuel Bernstein
• Special Assistant to the Chairman
• National Grid, US
• Presentation at the
• GAS INDUSTRY MICRO CHP WORKSHOP
• PARIS, FRANCE 29 30 MAY, 2008

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Outline

• Why mCHP?
• Technology evaluation and demonstration
• The obstacles to mCHP
• Conclusions

The views expressed in this presentation are
these of the author only and do not reflect
National Grid policy
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mCHP advantage in the NE of USA

• Climate Change Option
• Regional Greenhouse Gas Initiative, (RGGI) (Cap
  and Trade Program including NY, NH MA RI)
• New York
• City - 30 reduction by 2030
• State - 15 reduction by 2015
• Massachusetts Lead by Example Program
  (through 2080)
• Energy Efficiency Option
• Active Rebate Programs in MA, NH NY
• Cost to Benefit Metric (Based on Reduced Gas
  Consumption)
• Offer an alternative to use of Oil Electricity

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Issues Favoring Distributed Generation in the US

• Environment Global Warming
• Increased Efficiency
• LEED Points (at least 3 pts under EAc1)
• Rate of Increase in Energy Costs
• Massachusetts sell-back provisions
• Net Metering Interconnect
• Being Actively Sought in NY RI
• Local Electric Distribution Limits
• High Cost (especially Urban Areas)
• Demand reduction programs
• Concerns over EMF Radiation
• Difficulties Siting New Power Plants
• Community Opposition
• Environmental Concerns (Air Emissions, Thermal
  Discharge)

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Why do customers want on-site generation?

• No Worries About Outages/Blackouts
• Save Money on Energy Bills
• Independence From Electric Utility
• Greater Predictability of Energy Costs
• Help the Environment
• Home Office Needs
• Medical Equipment Needs

Consultant Survey
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As a key energy utility, National Grid is leading
Climate and Energy Efficiency Programs in North
America
Service mix

• Largest energy distribution in the US Northeast
• Customers
• 4.5 Million Electric
• 3.3 Million Gas

Includes 1.1 Million customers of the Long
Island Power Authority
Turn over 11.5 Billion
Does not include the commodity in the UK
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Possible Advantage of mCHP to the utility service

• Increased Overall Efficiency
• Potential for Customer Savings
• Environmental Benefits
• To be verified....
• Potential for Electric Grid Support
• Increase in Summer Gas Load

TYPICAL SEASONAL VARIATION OF NATURAL GAS
ELECTRICITY ENERGY USE
Normalized Natural Gas
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mCHP Technology options in North America

• IC engines Climate Energy / Honda (1 -1.2 kw)
• Stirling Engines (pre-com) Disenco (3kw)
• Fuel Cells (development) PEM and Advanced PEM
  Plug- Power, Vaillant, Pemeas (3-5kw), Clear Edge
  Power (5kw)

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Field Evaluation of mCHP

• Beta Unit Testing 19 sites in Eastern
  Massachusetts 2006/07
• Sample data
• Totals for the heating season
• Run Time 3,968 hours gas usage 732 Therms
• Auxiliary Furnace Run Time 450 hours gas
  usage 360 Therms
• Total Gas Usage 1092 Therms
• Electrical Generation 3,968 kwh
• Total Combined Heat Generated 884 Therms
• Fraction of Total Annual Heat Delivered by the
  mCHP 62
• Total Combined Annual Efficiency 93
• Energy Cost 1,747
• Combined heat and Electric Energy Cost Savings
  756
• Reduction in CO2 Produced 5,111 lbs. (2.5 tons)

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Current technology projects at IC (1/2)

• Evaluation of mCHP market and market barriers in
  NY
• 5 units test program (Climate Energy)
• Joint project with

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Current technology projects IC (2/2)

• Next generation mCHP unit for North America
• Hot water capability
• Back-up power capability
• 40 unit demonstration (NE US Canada)
• Joint project with
• Performed with

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Current technology projects Fuel Cells

• Advanced high temperature PEM fuel cell
  demonstration
• Joint project with
• Project performed with

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Issues Stifling Distributed Generation

• Electric Grid Connection
• High cost (relay protection)
• Reactive power limits/costs
• Onerous approval processes
• Customized application review
• Insurance liability
• Site (not product) certifications
• Electric standby-rates (One outage more than
  eliminates savings)
• High Cost Equipment (Up to 4,000 per kW
  Installation)
• Poor Performance of Some Systems
• Reliability (Maintenance Interval MBTF lt 1
  year)
• Emissions (excessive CO or NOX)
• Fuel Price Volatility

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Regulatory Progress

• Electric Grid Connection
• Most States have published Standard Interconnect
  Requirements (SIRs), (limited to 300 kVA in NY)
• IEEE 1547 type testing of grid protection devices
  universally recognized UL Standard for
  Inverters UIL 1741
• Special Gas Utility Rates for CHP for all size
  customers
• New Emissions standards (California proposed
  for NY)
• Net Metering
• Allows customer payback at rate paid for
  electricity (2-3 times avoided cost previously
  paid for)
• Most states allow only for renewable but
  considering for all CHP.
• Micro-turbines (Concern over on-board gas
  compressor) New Standard for Safe Use and
  Installation of Energy-Efficient Microturbine
  Systems will enable Owners to Participate
  in PlaNYC Goal of Increasing Clean Power
  Generation Mayor Bloomberg
• Public Utility Commissions Investigating
  Disincentives to CHP in NY MA
• Electric Gas Utility Financial De-coupling

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Active Discussion on Ways to Finance Distributed
Generation

• Government incentives
• Federal local
• Rate-based Gas utility incentives
• Transfer avoided cost from electric wires company
  to customer purchasing equipment
• Rate Design
• Offer electric load management rebates
• Emissions reduction credits
• NOX SOX (aggregate)
• Greenhouse gases
• Share customer savings or energy sales model

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Conclusions

• CHP has Tremendous Potential in All Sizes
• mCHP Making Progress in US
• Economic Obstacles Remain
• International Cooperation can help in identifying
  best solution
• Lower costs
• Economies of scale
• Innovation
• Code harmonization