cc project checklist

7/31/2019 Cc Project Checklist

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project

Plan yourcogeneration

Good Practice Guide/Project Checklist

Frequent Asked Questions List

A Good Practice Guide of small-scale cogeneration


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Good Practice Guide & project checklist................................. 2First rough assessment with easyCOGEN.xls........................ 4Feasibility study carried out by an expert................................ 5Choose your individual financing option ................................. 6Public support mechanisms .................................................... 7

Grid connection....................................................................... 8

New energy contracts ............................................................. 9Administrative licensing procedures ..................................... 10Environmental permit ............................................................ 11Green certificates procedures............................................... 12Call for tender........................................................................ 13Offers comparison................................................................. 14FAQ list General ................................................................ 15FAQ list Country specific ................................................... 17

COGENchallengeFacilitators ............................................... 19

Who we are........................................................................... 20


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Good Practice Guide & Project Checklist

If a cogeneration project is well designed, primary energy savings of 10 to 25% can be

achieved and sometimes even more. Projects with such a high amount of energy

savings are also known as "high efficiency cogeneration". In order to achieve these

results, it must be ensured that as little energy as possible is wasted. This can be only

done by using the total amount of heat and electricity produced by the cogeneration unit

in an effective and efficient way.

The first big challenge for the realisation of a high efficiency cogeneration project

therefore is to find the right capacity of the cogeneration unit. If the unit is too small, the

opportunity to save more energy is missed. If the unit is too big, energy will be wasted.Project developers determine the size of a unit always according to various criteria such

as the heat load, the electricity needs and the regulatory framework. Another important

aspect is the question, whether it is possible to sell excess electricity.

The purchase and the installation of a cogeneration unit is a considerable investment

which needs to pay back. The more hours of a year the cogeneration unit is in operation,

the more money is saved during this year. Therefore, project developers choose a size

for the cogeneration unit which does not cover the highest possible heat load but a loadwhich will allow the cogeneration unit to run for at least half the year.

If the technical and economical analysis is positive for a cogeneration plant, some legal

and other aspects have to be kept in mind. Depending on the size of the plant, an

operator needs permissions from different parties. The checklist on page 3 will provide

all necessary steps, from the first rough calculation to the running of the cogeneration,

but cannot cover all national regulations in the European countries. It is helpful to ask

local facilitators or engineers or the suppliers that have experience with cogeneration

installations. On page 19 of this guide you find the contact details of six regional

Facilitators (Austria, Belgium, France, Germany, Slovenia and Spain), which are

information and support facilities for small-scale cogeneration.


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easyCOGEN.xls

feasibility study

financing option

public support mechanisms

grid connection

new energy contracts

administrative licensing procedures

environmental permit

green certificates procedures

call for tender

offers comparison


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First rough assessment with easyCOGEN.xls

Depending on your site's energy needs and the operational requirements, a range of

energy experts can assist you in carrying out a proper sizing of your cogeneration

project. These may be the supplier of the cogeneration unit, an energy consultant or a

so-called energy services company (ESCO). With a "feasibility study" the experts can

measure your consumption of heating fuel and of electricity and simulate (with a

complex software tool) different sizes of cogeneration units. They can calculate for each

size the profitability and then propose the best option, giving also an assessment of the

economical benefits, the energy and environmental balance, and the technicalintegration into the building.

The challengeteam recommends to you to begin by doing the first assessment

yourself and for free. For this reason, we have created a simplified version of the same

software tool that energy professionals use in their work. The Excel-based software

easy .xls allows also non-experts to carry out a first rough assessment whether

the installation of a cogeneration plant is a good option or not. You can download this

Excel file on the www.cogen-challenge.org website. By entering key data of your project

(buildings, enterprise, offices, etc) in the blue boxes you can assess easily the size and

the profitability of a suitable cogeneration unit (results are shown in the grey boxes).
http://www.cogen-challenge.org/http://www.cogen-challenge.org/


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Feasibility study carried out by an expert

In most cases a feasibility study is necessary because there is no standard formula to

calculate the size of a cogeneration unit (unlike for a typical boiler). It means that for the

same enterprise or building, there is a wide range of suitable cogeneration size options,

but only one is the most beneficial for you. The main target is to assess the optimum

size of the cogeneration you can install.

A feasibility study, carried out by an expert, will calculate the best option for you. The

study will also give you an assessment of the economical benefits, the energy and

environmental balance, and the technical integration into the building. With all thisinformation, you are ready to order (or not) a cogeneration unit.

The challenge team recommends that the expert uses a simulation software,

like the Excel COGENsim.xls software, which is very useful to carry out the feasibility

study. This software will simulate, 1/4 hour by 1/4 hour, different sizes of cogeneration

units and calculate the price and cost-effectiveness for each size. Then the expert can

suggest to you the best option according your wishes (profitability, CO2 savings,

investment, reliability). This Excel software is freely available on the www.cogen-

challenge.org website.
http://www.cogen-challenge.org/http://www.cogen-challenge.org/http://www.cogen-challenge.org/http://www.cogen-challenge.org/


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Choose your individual financing option

As with all other investments in life the rate of return of your investment in cogeneration

depends on the level of risk that you are willing to take. You have different options:

1. You manage the entire investment by yourself, but you can outsource part or all

of the maintenance. You control the project and the benefits;

2. You ask a bank, even an investment fund, to finance the cogeneration unit and

you can also outsource the maintenance. You also control all the project;

3. You sign a "partnership contract" with an energy supplier or producer, also called

an Energy Service Company (ESCO), who will provide an individual range of

services, from design and installation to operation, maintenance and monitoring,

including finance. Most importantly, the ESCO guarantees the user certain

thermal and electrical outputs at agreed prices from the CHP-installation for the

duration of the contract. In this case, the ESCO owns the unit;

4. You agree to a so-called Third Party Financing (TPF) contract. In this case, a

third partner will carry out all the investment and the maintenance of the unit. But

you stay the owner of the project. You work with the TPF on a open contract

basis: the "true" benefits are retrofit to all parties.

You should thoroughly assess, which option fits best to your financing plan. If you want

to know more about financing cogeneration projects, please consult the Guidance

Document on CHP FinancingGuide on the challenge website.


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Public support mechanisms

This is an important item, but not essential, for the potential investor and needs to be

thoroughly checked. All over Europe there are different public support mechanisms for

cogeneration in place: grants for study costs and/or investment, feeding tariffs, green

certificates, tax allowance, better VAT rates, ... It is sometimes necessary to contact a

variety of different public authorities in order to receive all financial support (for the

actual investment but also for the feasibility study or for the operation costs).

It is important to know how you will finance the cogeneration project in advance because

some financing options, like the "partnership contract", do not allow additional publicsupport mechanisms in some countries. Be aware that sometimes you need to ask the

public authorities before you decide to invest in a cogeneration unit.

You will find more information on the financial and regulatory support mechanisms in

your country on the challengewebsite. In order to have complete information on

possible support, you should also ask a regional expert or Facilitator in this field. On the

last but one page of this guide you find the contact details of six regional Facilitators

(Austria, Belgium, France, Germany, Slovenia and Spain) which are information and

support facilities for small-scale cogeneration.


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Grid connection

The electricity distribution network operator should be involved in the project at an early

stage. In the case of bigger units the impact on the grid needs to be checked and the

point of interconnection needs to be defined. It is also helpful to know the

interconnection costs. These costs can vary from 5 to 20% of the total installation costs,

sometimes cheaper. This information (interconnection feasibility and costs) are part of

the "connection contract" you will generally pay to the distribution network operator. This

step must then occur just after you decide to install a cogeneration unit in your building.

More often, the distribution network operator will facilitate the interconnection of your

cogeneration unit. For instance, the electricity produced by a cogeneration unit might

receive preferential treatment when fed into the grid. The distribution network operator is

normally the right address to find out about the conditions in your country and region. In

some countries you will be asked to add a "decoupling connection" system to your

cogeneration plant. The performance of this decoupling system needs to be tested

before you start to run your cogeneration plant. The distribution network operator will

also check and often change the electricity meter.


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New energy contracts

Running a cogeneration unit may have an effect on the price you pay for the remaining

electrical energy. Even if your electricity bill will decrease after installing a cogeneration

unit, the unit price of your electricity might increase because you purchase less energy

for the same power supply. This effect has been taken into account in the feasibility

study. Now a final contract has to be asked from the energy suppliers, not only for the

remaining electricity (you will probably need after installing a cogeneration unit),

including back-up if the cogeneration unit is switched off, but also for the surplus

produced by the cogeneration unit. The feasibility report, which normally contains anaccurate estimation of the new electricity profiles, can help you in this negotiation. In

some cases your current contracts can remain the same if you install a cogeneration

unit.

Contrary due to the installation of a cogeneration unit your fuel consumption on the site

will increase, you can probably negotiate a better unit price. Therefore you should

contact your fuel supplier and his competitors to amend the contract, if necessary.


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Administrative licensing proceduresAdministrative licensing procedures

In some countries, the authorities will require you to fulfil certain legal regulations

concerning your license, such as to generate electricity and to sell it to a third party.

These regulations vary substantially depending on your country and region. In order to

clarify these rules you need to ask a cogeneration expert even the Facilitator. On the




In some countries, the authorities will require you to fulfil certain legal regulations

concerning your license, such as to generate electricity and to sell it to a third party.

These regulations vary substantially depending on your country and region. In order to

clarify these rules you need to ask a cogeneration expert even the Facilitator. On the




In Belgium, the best option is to self-consume the electricity produced by the

cogeneration unit. The possible surplus can be sold to a supplier or to a third party. As

the licensing procedures are quite complex, we suggest to sell this surplus only

In Belgium, the best option is to self-consume the electricity produced by the

cogeneration unit. The possible surplus can be sold to a supplier or to a third party. As

the licensing procedures are quite complex, we suggest to sell this surplus only to a

supplier for whom you do not need a license. Even the price from a third party could be

quite higher than the supplier's price.


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Environmental permit

Depending on your home country and region, you might need a permission from the

public authorities in order to install a small-scale cogeneration unit. The building

regulations vary substantially across Europe, so that a general statement towards the

permit procedure is difficult to make. In any case, you should inform yourself on the

specific requirements in your region.

The environmental permit includes in each country certain regulations on air quality that

need to be fulfilled. Emissions of nitrogen oxides (NOx) typically cause the greatest

concern and legislative attention. Nitrogen oxides are toxic, they cause acid rain and

contribute to the depletion of the ozone layer. Emissions can be reduced by a regularly

maintenance of the cogeneration plant and by installing catalysts on the exhaust gas.

Additional emissions regulations may concern sulphur dioxide (SO2), carbon monoxide

(CO) and dust. Modern cogeneration plants can meet these requirements.


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Green certificates procedures specific to BelgiumGreen certificates procedures specific to Belgium

Citizens in Belgium, who want to publish a call for tender, need to certify their future

cogeneration unit if they want to get green certificates. The green certificates system

gives a grant when you save CO2 emissions (in Brussels and Wallonia) or when you

save energy (in Flanders) with your cogeneration unit. These green certificates can be

sold to the energy suppliers who need them to give back to the government, if they do

not want to pay a fine for missing green certificates.

Citizens in Belgium, who want to publish a call for tender, need to certify their future

cogeneration unit if they want to get green certificates. The green certificates system

gives a grant when you save CO2 emissions (in Brussels and Wallonia) or when you

save energy (in Flanders) with your cogeneration unit. These green certificates can be

sold to the energy suppliers who need them to give back to the government, if they do

not want to pay a fine for missing green certificates.

The cogeneration owner can then receive a financial advantage which in some cases

can be very important, as shown in the table below.

The cogeneration owner can then receive a financial advantage which in some cases

can be very important, as shown in the table below.

253 / 292

184 / 183127

128

50

45

0

/MWh

electricity

92113Wind / Hydro / PV cell138113/ 143Biomass cogen (farm biogas/rapeseed)

/MWh

electricity

/MWh

electricityTechnologies

184122 / 146Biomass cogen (wood/landfill gas)

92126Biomass (dual-fuel) cogen

3036Steam turbine

2633Gas engine/turbine

1630Oil cogeneration

253 / 292

184 / 183127

128

50

45

0

/MWh

electricity

92113Wind / Hydro / PV cell138113/ 143Biomass cogen (farm biogas/rapeseed)

/MWh

electricity

/MWh

electricityTechnologies

184122 / 146Biomass cogen (wood/landfill gas)

92126Biomass (dual-fuel) cogen

3036Steam turbine

2633Gas engine/turbine

1630Oil cogeneration

You first need to fill in the forms and send them to the energy market regulator.

Depending on your region, download these documents on : www.ibgebim.be (Brussels:

), www.cwape.be (Wallonia: ) orwww.vreg.be (Flanders: ).
http://www.ibgebim.be/http://www.cwape.be/http://www.vreg.be/http://www.vreg.be/http://www.cwape.be/http://www.ibgebim.be/


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Call for tender

Unless you know the technology and/or partner you will choose, we suggest to

undertake a call for several tenders for the cogeneration unit which you want to install on

your site. The call for tender depends on the financial option is yours. If you prefer to

keep the management of the project, you will ask suppliers of cogeneration units;

otherwise you have to ask several energy partners (ESCO) or third part financing

partners for an "all include" contract: the cogeneration unit installation, but also the

related services (maintenance and management).

The feasibility study will certainly help you to write this call for tender and, afterwards, to

compare precisely the offers.

On the challenge website, you can download the European Directory of

Cogeneration Developers.


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Offers comparisonOffers comparison

It is important to compare the offers with the results of the feasibility study and to

compare the different offers. During the comparison, you need to determine the best

technology but also the best supplier/partner.

It is important to compare the offers with the results of the feasibility study and to

compare the different offers. During the comparison, you need to determine the best

technology but also the best supplier/partner.

The regional Facilitator as proposed and established by the challenge

campaign, can help you to draw up a list of criteria for this important step. On the last

but one page of this guide you find the contact details of six regional Facilitators



The regional Facilitator as proposed and established by the challenge

campaign, can help you to draw up a list of criteria for this important step. On the last

but one page of this guide you find the contact details of six regional Facilitators




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FAQ list General

Cogeneration is the simultaneous productionof electricity and heat. For small and medium

installations a combustion engine firing natural

gas, biogas or diesel is often used that drives

a generator to produce electricity. Moreover,

the heat released by the engine in the cooling

water and in the exhaust is recovered by heat

exchangers to be used to heat a building or to

make domestic hot water.

The principal reason is that this technology

makes it possible to consume less primary

energy to produce the same quantities of

electricity and heat, and thus a reduction in

energy costs. It also results in a reduction of

gas emissions and thus pollution.

The answer to this question is not immediate

and very often requires a small pre-feasibility

study. This can be made by yourself thanks to

the pre-feasibility guide Install acogeneration in your establishment, available

from this project. If this looks promising then

further investigations will be necessary.

No, there can be periods when the

cogeneration can stop. During design it is

necessary to consider carefully the

dimensioning of the cogeneration to optimise

the operating regime. In any case, it is normal

that during periods of low or no heat demand

the cogeneration unit will stop.

No, a well designed and well installed

machine is not noisy at all. The majority of the

machines is delivered in a sound-proof

enclosure and can reduce the noise to a very

low level.

No panic, you are always connected to the

electrical supply network and your system of

traditional heating. The change of one to the

other is done in an entirely automatic way.

The cogeneration unit usually can be quickly

repaired.


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No. A European Directive, yet to be adopted,

forbids an emergency power unit to function

uninterrupted , which is practically the

case of cogeneration. An emergency power

must, no matter what happens, always be

available. However, adding a unit of

cogeneration to the already existing

emergency power unit makes it possible to

profit from a secondary emergency power

unit of comfort. Moreover, this secondary

emergency power unit can be fed with natural

gas and/or fuel oil, contrary to the

principal emergency power unit which can

only be fed with fuel oil.

The cogeneration unit will be normally

controlled by the demand for heat.

If there is no more request for heat, the

cogeneration will stop. It will start again when

the demand for heat is sufficient. A balloon

with a reserve of hot water makes it possible

to accumulate a certain quantity of heat and to

return this heat at another time. It will be the

object of the optimisation and the guiding of

the installation.

There are energy service companies who

offer a complete range of services at

guaranteed prices. They even can arrange

financing. For details see the TPF-guide

(Third-Party Financing) or the database on the

challengewebsite.


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FAQ list Country specific

Brussels Capital:

You obtain green certificates (currently about

70 certificate) when your cogeneration plant

saves more than 5% of CO2 compared with

the CO2 emissions of the traditionalproductions of the same electricity and heat.

Wallonia:

You obtain green certificates (currently about

90 certificate) when your cogeneration plant

saves more than 10% of CO2 compared with

the CO2 emissions of the traditional production

of the same electricity.

Flanders:

The Flemish Region has two different

certificates:

Green power certificates (for installations

with electricity production from renewable

energy sources; one certificate per kWh

produced electricity) and the price per

certificate = 90 to 95% of the penalty price

( 125);

CHP certificates (only for installations who

have a system to utilise the heat as efficient

as possible and have relative Primary Energy

savings more than 5%). The price per

certificate: +/- 38, penalty price = 40.

Each regional Government gives grants for

the feasibility study costs (about 50%) and for

the investment cost (from 10 to 30%). The

Federal Government gives also a tax

allowance reduction of 13.5% (private

companies) to 15% (residential)

Fixed feed in tariffs are offered for

cogeneration unit respecting the

requirements: for units below 36 kVA it is the

same as the price paid for electricity and for

units above it is calculated according to a

reference system (combined gas cycle) and

differentiated according to the supplied power.

The contract is running for 12 years. Certain

regional authorities in France (like e.g. in

Rhne-Alpes) are also giving investment

subsidies for units below 1 MWe to owners

from the public and semi-public sector (up to

30%). Feasibility studies can be supported by

the national French energy and environment

agency and also by some regional authorities

(up to 70%).


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The Cogeneration Act (April 2002) guarantees

temporary bonus-payments from the

operators of the public grid for CHP electricity

transferred to the public grid. The amounts of

bonus-payments vary according to the type of

CHP installation, and are declining. An

accreditation from the Federal Office of

Economics and Export Control (BAFA) for the

installation is requested. The amount of the

bonus-payments varies from 1.53 cent/kWh in

2002 reduced annually to 0.97 cent and

phasing out in 2006 for existing CHP plants, to

5.11 cent/kWh for new small installations up to

50 kW if continuous operation is taken up until

end of 2005 as well as for fuel cell plants for

ten years. The estimated total cost of these

bonus payments is 4.45 billion between

2002 and 2010. 2003 approx. 700 million

(bonus-element). Vegetable oil and biogas

fired CHP installations are especially funded

by the Renewable Energy Sources Act.

Supported feed in tariff are only available for

certain installations depending on fuel and

electric power output. Fuel used is exempted

from energy tax. Different investment

incentives are available for installationsdepending on power output and

environmental benefit.

Fixed feed in tariff is offered for excess

electricity sold to the greed. Network system

operator is responsible for the purchase of all

offered electricity and obliged to conclude 10

years feed-in contract. CHP operators are not

paying balancing costs. Fuel used by CHP

unit is exempted from payment of CO2 tax

(0.44 kg CO2/kWhel). Subsides for preparation

of investment documentation are tendered by

Ministry of the Environment and Spatial

Planning.

The Electricity Act (1997) guarantees

temporary bonus-payments for the electricity

transferred either to the grid operator or to the

pool market. The bonus vary from 22.8

MWh to 15.2 MWh depending on the

installed capacity. For small installations under

1 MW there is a special feed in tariff of 68.4

MWh. There are not tax exemptions for fuel

costs. The Government is now giving a

national grant for the feasibility study

(maximum 75% of the study cost) and a

subsidy of 10% (maximum 200,000) for non

industrial CHP investment.


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COGENchallengeFacilitators

Paul Fay

Galvanistrae 28

D- 60486 Frankfurt am Main (Germany)

Tel: +49 69 212 39199

Fax: +49 69 212 39472

Email: [email protected]

Reinhard Six

10 rue des Archers

FR-69002 Lyon (France)

Tel: +33 4 78 37 29 14

Fax: +33 4 78 37 64 91


Ismal Daoud

Cogeneration Facilitator for Wallonie

Bd Frre Orsban, 4

B-5000 Namur (Belgium)

Tel: +32 81 250 480Fax: +32 81 250 490


Jan Bleyl

Kaiserfeldgasse 13/I

A-8010 Graz (Austria)

Tel: +43 316 811 848-20

Fax: +43 316 811 848-9


Carlos Garca

rea de Relaciones Externas

C/ Fray Paulino, s/n

E-33600 Mieres (Spain)

Tel: +34 985 46 71 80

Fax: +34 985 45 38 88


Stane Merse

Jamova 39

SI - 1000 Ljubljana (Slovenia)

Tel: +386 1 5885 250 or 210

Fax: +386 1 5885 377

mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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