ESCo Financed Gas Combined Heat & Power
Gas Combined Heat & Power (CHP) systems can provide significant savings to businesses that have a significant thermal and electrical demand. A correctly sized CHP system generates electricity on-site so efficiently that it saves not just money but also produced heat and reduces CO2 emissions. But if the capital cost of installing a CHP unit is prohibitive, Sustinere UK can provide an Energy Services Company (ESCo) financed option that brings you the benefit of lower heat and power costs, with no capital expenditure and no O&M costs for up to 20 years.
Client: Industrial Laundry
Problem: Client has 2 steam boilers providing steam and hot water to industrial laundry site. One boiler is old, inefficient and in need of replacement.
Replace existing old inefficient steam boiler with a new replacement boiler. Retain the other steam boiler as back up. Introduce a CHP unit to pre-heat water feeding the new steam boiler.
Predicted Energy Savings
Under the ESCo, the laundry’s annual running costs (energy bills and O&M) will reduce by £44,265. Since 2004, electricity prices have risen on average by 6% per year. In contrast our CHP generated electricity prices will be linked to RPI which currently is 3%. Based on the historical Grid electricity average increase of 6% and assuming RPI over the period will be at 4%, the chart illustrates the increased savings from utilising ESCo funded CHP electricity.
In the final year of the ESCo contract, annual Grid electricity costs will be approximately 2.5 times greater than CHP generated electricity costs. On this basis, the projected CHP generated electricity costs over the 20 year contract period is £2,476,345. Predicted Grid electricity costs over the same period will be £5,244,154. This represents a saving of £2.7m.
ESCo Proposal & Benefits
The ESCo will provide £480,000 capital investment to meet the full cost of removing the existing boiler, and replace it with a new boiler and a CHP unit. The ESCo recoups its investment trough a 20 year contract selling heat & power produced by the CHP/boiler system. The ESCo will meet all operation, maintenance and repair costs for the Heat & Power system over the period of the ESCo contract. The CHP/boiler system will generate electricity at 8.5p per kWe and heat at 2.5p per kWt.
What is CHP?
Traditionally, electricity is generated at centralised power stations that are only in the region of 40% efficient. Coupled with 5% typical transmission losses, the overall efficiency is reduced to around 35%. CHP overcomes this shortcoming by physically placing generation equipment (often an Internal Combustion Engine coupled to an alternator) within the end-user facility, creating a decentralised setup.
Don’t be left in the dark
Do you have ‘business critical’ processes?
When there is a G59 event, a CHP unit will detect the event even before it reaches blackout , and will switch to Island Mode to protect the site infrastructure from potential damage and maintain supply to the essential equipment or process. When the incoming supply has been proven safe for 5 minutes, the CHP will parallel with the incomer and allow the non-essential equipment to be supplied once more. Without this protection there is serious potential for equipment to rip on their own protection devices. Irrevocable equipment damage can occur if anti-surge devices are not fitted.
The ESCo will fund the installation of a CHP unit at NO COST to you, guaranteeing you a seamless security of supply to your business process. An ESCo CHP will protect you from the increasing electrical costs associated with supporting the failing network. An ESCo funded CHP will reduce your energy bills. An ESCo funded CHP will improve the green credentials of your business. The ESCo will be responsible for Operating & Maintaining the CHP, and will put in place Service Level Agreements to ensure your business can rely on the CHP working 100% of the time.
Benefits of CHP – be energy efficient, Save money, increase profits, improved greener credentials
- Base load electrical supply
- Increased diversity for heating and hot water Steam raising capabilities on larger units Trigeneration, using absorption chillers for cooling
- Reduced primary energy use
- Stabilised electricity costs over a fixed period
- Reduced primary energy use
- Reduced CO2 emissions
- Help with Carbon Reduction Commitment (CRC)
- Reduced transmission losses
- Lower NOx emissions with use of natural gas as fuel compared to diesel generators
- Can contribute to Part L compliance
- Helps with EPC rating for lease compliance regarding 2018 Energy Act
“CHP is around twice as efficient as conventional power generation and provides cost savings of up to 40% over electricity sourced from the grid and heat generated by on-site boilers”.