Cogeneration Continues to Make Inroads

cogenerationThe filing of an application with the North Carolina Utilities Commission has put Duke University one step closer to a big combined heat and power project.

The filing — an application for Public Convenience and Necessity — was made by Duke Energy Progress. It details the plan for Duke Energy Carolinas to build, own and operate a 21 MW natural gas cogeneration (or combined heat and power) plant on the Durham campus. The project was announced in May. The plan is for the natural gas-fed platform to generate electricity and repurpose excess heat from the process to generate thermal energy and steam, according to the initial press release. The CHP plant would produce about 75,000 pounds of steam every hour.

The project will reduce the university’s carbon footprint by 25 percent. If the approval is granted, the plan is to finish construction in 2019. The next phase, according to the university, would be to create a campus microgrid that would keep the lights (and heat) on in case of an outage.

Testimony from James Northrup, the Director of Wholesale and Retail Analytics for Duke Energy Business Services LLC, a Duke Energy Carolinas affiliate, was appended to the application. Northrup laid out the familiar potential benefits of the project. He also described some side benefits to the power company. In short, Northrup testified that such projects are beneficial to the utilities as they are to their customers.

Infrastructure located at the customer sites produce excess energy that can be sold to those nearby. This cuts transmission costs. In short, Northrup essentially says that CHP can be a win all around:

Additionally, [the CHP approach is] financially beneficial for steam host customers because DEC can sell steam from the turbine generator waste heat/heat recovery stream generator process for less than the customer’s ability to self-produce steam using a dedicated customer owned gas boiler. With revenues from customer steam sales credited back to DEC electric customers, CHP is an attractive resource for cost effective distribution generation.

An interesting side note is that Duke Energy and Duke University both trace their roots to James B. Duke, a businessman who lived from 1856 to 1925.

Here is a deep dive on cogeneration technology from Forester Media. The prospects for the approach may soon get a boost in New York State. Breaking Energy last week posted a story detailing a rate case that has been brought to the New York Public Service Commission (NYPSC). A rate case, the story explains, is the way in which rates and policies are reviewed and changed. This one was brought before the NYPSC, which is considered a bellwhether in the state, according to the story, by more than 20 parties.

The rate case is aimed at adjusting the standby tariff, which is a special rate charge for industrial and commercial customers who produce partially produce their own energy. The changes being recommended could make cogeneration the big winner:

The joint proposal recommends a much longer exemption for combined heat and power systems. Known more commonly as CHP, combined heat and power systems are most likely to be installed by businesses, industry, and institutions such as universities and hospitals.

The benefits of CHP are leading more businesses to enter into projects. Decentralized Energy reported that a plant at the Erving Paper Mill in Erving, MA, is online after completing 4,000 of operational testing, which included transition to island mode several times.

It is not all easy sailing for CHP, however. The (Pottsville) Republican Herald describes the travails of the cogeneration industry in Pennsylvania. The problem isn’t the technology. It’s the business case. In Pennsylvania, according to the story coal refuse is disposed of via cogeneration. However, the fact that the price of natural gas is falling is depressing demand. The story focuses on a hearing held in Jim Thorpe by the Senate Environmental Resources in which the cogeneration interests in the state argued in favor of preserving helpful tax breaks.

The heart of the CHP concept – using formerly wasted excess heat generated by one process to drive another – makes intuitive sense. It increasing is working in the field, though no technology doesn’t face challenges.


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2 thoughts on “Cogeneration Continues to Make Inroads

  1. Financing solutions are critical to discuss early in the sales engagement process for CHP. Many options are available, and I would be happy to discuss and share resources.

  2. Cogeneration is a technology that had been around for decades. Utility companies used to discourage the use of it but now that appears to be changing. It is a proven and cost effective system when sized correctly.

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