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 produces 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 the benefit of lower heat and power costs with NO capital expenditure, and no O&M costs for up to 20 years.
This case study illustrates how the ESCo model can work for you.
Client: Peter Brotherhood
Problem: Client was facing high heat, cooling and electricity bills
Project funding: The entire project to be delivered through the fully funded, serviced, installed, managed, fuelled and maintained ESCo model.
replace existing inefficient Chiller and boiler with new chiller and CHP unit 350kWt/230kWe to be installed within a purpose built containerised plant room. The CHP will generate heat, cooling and electricity at lower rates than are currently being paid. ESCo will fully fund the £645k CHP/chiller installation costs.
Estimated Projected Electricity Savings
Under the ESCo, Peter Brotherhood will see a reduction in their energy bills of £30,000 in the first year.
Since 2004, electricity prices have risen by an average of over 6% per year. In contrast, our CHP generated electricity prices will be linked partly to RPI (which currently stands at 3%) and partly to gas prices.
Based on the historical grid electricity average increase of 6%, and assuming the CHP generated electricity price rises by 4%, the below 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 60% higher than those of the ESCo gas CHP generated electricity.
On this basis, the projected CHP generated electricity costs over the 15 year period is £2,658,131. Predicted grid electricity prices over the same period will be £3,776,526.
The represents a saving over the ESCo contract period of £1,118,395
* https://www.gov.uk/government/statistical-data-sets/gas-and-electricity-prices-in-the-non-domestic- sector
ESCo Proposal & Benefits
The ESCo will provide£645,000 capital investment to meet the full cost of removing the existing chiller and boilers and replacing them with the CHP and new chiller
The ESCo recoups its investment through a 15 year contract selling heat, cooling and power produced by the CHP system
The ESCo will meet all operations, maintenance and repair costs for the Heat & Power system over the period of the ESCo contract
The CHP/boiler system will generate electricity at 9p per kWe and heat at 2.82p per kWt.
What is CHP?
Traditionally, electricity is generated at centralised power stations that are only in the region of 40% efficient. Coupled with typical 5% transmission losses, the overall efficiency is reduced to around 35%.
CHP overcomes this shortcoming by physically placing generation equipment (often and internal combustion engine coupled to an alternator) within the end-user facility, creating a de-centralised set up.
While the mechanical efficiency of this generator is often no better than the traditional centralised set up, the thermal energy can easily be channelled into the building’s heating (and cooling) system, significantly reducing the fuel consumption of the on-site boiler plant.
Protecting your business against energy blackouts
There is a real energy crisis playing out across the UK. Large numbers of Coal fired power plants being shut down for maintenance and closure.The UK capacity margin for electricity generation fell to just 1.2% last Winter. The National Grid are having to pay up to £2500 per MW/Hr for Short Term Operational Reserve power generation 960x the usual price for power).
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.