FEMP's Early CHP Projects Show Success

March 31, 2005

Three years ago FEMP launched a program to make combined heat and power (CHP) technologies easily accessible to federal agencies that wanted to save energy and costs and enhance the energy security and reliability of their facilities. Responding to growing interest among federal energy managers, and led by a FEMP assessment estimating that CHP could be cost-effective and pay for itself in about 7 years in about 9 percent of large federal facilities, FEMP began offering assistance to help agencies screen for feasibility and implement CHP projects.

FEMP initially identified six projects as good prospects for support, and five of these projects have now been completed—four financed through energy savings performance contracts (ESPCs), and one through a utility energy services contract (UESC). These projects are part of a significant upsurge in CHP. Since 1999, 28 distributed energy or CHP systems representing more than 81 megawatts of capacity were installed at federal facilities.

The success of these projects show how CHP can improve the quality, reliability, and security of power systems at federal facilities, as well as reducing greenhouse gas emissions and energy costs. Two of the largest of these projects—Fort Bragg and Twentynine Palms—are also good illustrations of the value of alternative financing in bolstering energy security for federal installations.

Fort Bragg

Fort Bragg's Public Works Business Center (PWBC) is responsible for the almost 30 million square feet of facilities at the 84-year old Fayetteville, North Carolina installation. It began an energy partnership with Honeywell in 1997 that has helped Fort Bragg cut total energy costs by more than 25 percent and leveraged $66 million in privately-financed improvements at no additional operating cost to the government.

Honeywell's first-of-a-kind 5-megawatt CHP plant features dual use of turbine exhaust, modulating between exhaust-firing an absorption chiller to produce chilled water for air conditioning and feeding a heat recovery steam generator for serving heat loads. The system's advanced control software optimizes individual component operation and overall system response to time-varying energy rates and electric, chilled water, and steam loads. By recycling the waste heat, the effective efficiency of power generation rises to 70 percent—about double the efficiency of central station power plants—and the project will save about $1.8 million per year.

The large turbine that drives the CHP system improves Fort Bragg's abilities to manage electric demand and operate in an "island" mode in the event of a prolonged outage on the main grid. The costs for developing the prototype system were shared between DOE's Office of Distributed Energy (through Oak Ridge National Laboratory) and Fort Bragg, which obtained financing through the ESPC with Honeywell.

Twentynine Palms

This project is another outstanding demonstration of CHP's value for addressing both energy cost and energy security issues. More than 10,000 military personnel and their families live at the Marine Air Ground Task Force Training Command (MAGTFTC) at Twentynine Palms, located in the desert 45 miles north of Palm Springs. With summer temperatures as high as 120F, adequate cooling is a significant concern, as are energy security and reliability, since MAGTFTC is at the end of the Palm Springs electrical distribution system.

Through an ESPC with Johnson Controls, Inc., MAGTFTC now has a $16 million cogeneration system that includes a 7.2- megawatt dual-fuel gas combustion turbine and more than 3 miles of high-pressure gas lines. The turbine exhaust is captured in a heat recovery hot water generator that produces an average of 35 million Btu per hour for the high-pressure district hot water loop; the heat also powers a 200-ton absorption chiller used for precooling of the turbine inlet air. Selective catalytic reduction equipment enables the system to meet air quality standards.

The guaranteed savings of $5.8 million per year means that the project will have a simple payback of 3.5 years. The revenue stream from this project is providing the financing for phase three upgrades under an additional ESPC; these include a 1.2- megawatt photovoltaic system, three chiller plants, and other critical infrastructure improvements. When the upgrades are complete, the overall system efficiency is expected to be 75 percent, more than double the average efficiency of the U.S. electric grid.

San Diego Naval Medical Center

The Naval Medical Center, San Diego (NMCSD; also known as Balboa Naval Hospital) is the most technologically advanced Navy medical treatment facility. NMCSD received design assistance from FEMP's CHP team to evaluate the options available for an upgrade of its cogeneration plant and signed a UESC with San Diego Gas & Electric to install a CHP system. The project includes turbine replacement (a 4.5-megawatt to replace a 2.4-megawatt turbine), heat recovery replacement, chiller replacements, and cooling tower installation. This project also captured funds from the sale of emissions allowances in the California South Coast Air Quality District.

VA San Diego

The Veterans Affairs San Diego Healthcare System signed an ESPC with Sempra to replace the existing 880-kilowatt gas turbine cogeneration system located in the central plant with a larger, cleaner-burning, more efficient 4.5-megawatt gas turbine. The installation cost for this system is estimated at $6.7 million. After the system is completed in early 2005, it is expected to yield annual energy savings of $1.5 million, resulting in a simple payback time of 4.4 years.

VA Los Angeles

CHP can be particularly cost-effective in medical facilities because of their large requirements for air quality control and their need for reliable backup power supplies. FEMP's initial screening indicated that the Veterans Affairs Greater Los Angeles Healthcare System could benefit from CHP, and VA is planning to install a 5-megawatt turbine, which is expected to produce energy savings of $2.1 million annually, with a simple payback of 3.7 years.

Hill Air Force Base

Although Hill AFB did not install CHP because FEMP's CHP team ultimately determined that the system under consideration was not cost-effective, the base did install other efficiency upgrades, awarding the first delivery order under the FEMP Biomass and Alternative Methane Fuels (BAMF) Super ESPC program in September 2003 to Exelon Services Federal Group. The principal energy conservation measure is use of landfill gas to generate electricity. The delivery order will bring $4.9 million of private capital investment to the base, resulting in $17 million of energy cost savings over the 20-year period covered by the contract. The base is currently looking at using other BAMF resources for CHP applications as a follow-on effort to the initial project.

How FEMP Helps

CHP is gaining attention as a technology that can improve the quality, reliability, and security of power systems at federal facilities while also helping to meet federal energy efficiency goals. FEMP's CHP team can help agencies connect with privatesector technology partners and financiers. For federal facilities that express an interest in CHP installation, FEMP takes basic data provided by the facility and produces a summary report that helps managers understand factors affecting their site's CHP economics and decide whether to pursue a CHP project.

The FEMP CHP team, which is based at Oak Ridge National Laboratory (ORNL), provides site surveys and feasibility verifications, collection of baseline data, design and technical assistance, and assistance in using alternative financing. FEMP also provides design verification, component matching, and system sizing to thermal and power profiles; technical and price proposal evaluation; advice for addressing policy and regulatory constraints; and project facilitation.

CHP can also be a key component of a facility's energy security by providing backup power during a power outage, and FEMP's offerings include help with developing energy security plans. This includes help in identifying critical loads and emergency back-up systems, as well as developing vulnerability assessments, emergency operations plans, and remedial action plans.

For more information, contact FEMP CHP Core Team leader Kirby Wilcher, 865-574-0429.