Page 336 - Sustainable On-Site CHP Systems Design, Construction, and Operations

Sustaining CHP Operations 309

• CHP electrical effectiveness (which is equal to the net power output divided by
the difference between the fuel input and the total recovered heat)
• Amount of avoided fuel purchases
• Amount of avoided pollution

Calculating and comparing the cost to produce individual facility services (e.g.,
electric power, steam, chilled water, or domestic hot water) on a per unit delivered
basis (e.g., kWh, therms, or ton-h) provides CHP stakeholders with key information
upon which to base important decisions. Utility production unit costs are also required
in order to calculate the overall CHP plant savings described below. The CHP plant
utility services provided by the CHP plant, of course, depend upon the type of the CHP
plant itself. Some CHP plants, for example, provide: electricity at multiple distribu-
tion voltages, steam at multiple distribution pressures, high-temperature hot water,
heating hot water, domestic hot water, chilled water, compressed air, and treated
water such as deionized (DI) and reverse osmosis (RO); while other CHP plants just
provide electricity at a single voltage and steam at a single pressure (or heating hot
water at a single temperature). Whatever utilities are provided by the CHP plant
should be fully metered and all costs accounted for. Most purchased utilities have some
time-of-use or tiered consumption rate schedule that must be factored into the CHP
plant’s calculations and analysis. For example, the cost to generate electric-power-
produced chilled water will likely be less expensive at night versus during the day
(unless the facility is on a flat tariff rate schedule), while the value of CHP-produced
power will likely be more valuable during the day than at night. Typical unit cost
comparison metrics include
• CHP cost of kilowatthour versus utility kilowatthour cost
• CHP cost of unit of heat (e.g., pounds of steam, Btu, therms, or kJ) versus local
boiler–produced unit of heat
• CHP cost of generated cooling (e.g., Btu, ton-h, kJ) versus local chiller

In order to compare unit costs, the total cost of individual CHP-provided services
must be calculated and determined. Cost analysis can sometimes be challenging and
results can shift depending upon how costs are allocated. For example, how to allo-
cate fuel costs between electricity and heat production is an important question. This
follows since how fuel costs are allocated between CHP plant generated utilities will
affect the unit cost analysis and metrics results. Similarly, how to account for labor
costs between the various CHP plant–supplied utilities is also an important question,
since not all equipment requires equal supervision. For example, a high-pressure
HRSG probably has mandated 24-hour-per-day licensed operator requirements, while
an electric-drive centrifugal chiller with a unit control panel only needs to be checked
periodically. Comparing the cost to provide CHP-generated utilities versus the BAU
case should show that a positive rate of return is being achieved, that is, the cost to
generate CHP utilities should be less than the BAU case. Note that achieving the low-
est unit cost for delivered utilities does not necessarily indicate or guarantee that the
maximum ROI is being achieved (e.g., there might be a case where unit costs are
greater but a higher total CHP plant revenue is achieved for the same fixed costs
yielding a better return).