ohio chp pilot a puco and u.s. doe partnership
TRANSCRIPT
March 4, 2013 NGA Policy Academy
Cheryl Roberto, Former Commissioner Public Utilities Commission of Ohio
Ohio CHP Pilot: A PUCO and US DOE Partnership
Snapshot of Ohio CHP Potential Current Potential
CHP Implementation in Ohio 530 MW 9,800 MW CHP % of Total Ohio Electric Generation 2% 29.4% Nationally, CHP % of Total Generation 8.0% -
Market Sector Gen. Potential* (MW)
Paper 2,329 Chemicals 2,838 Primary Metals 430 Food 310 Other Industrial 767 Commercial/Institutional 3,082 Total 9,800
CHP Technical Potential
* Includes CHP export potential 2
Why CHP matters to the PUCO
PUCO’s statutory responsibilities: • Energy assurance and reliability • Addressing market deficiencies • Encouraging diversity of electricity supply • Ensuring emergency preparedness
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Why now?
Clean Air Act’s Industrial Boiler MACT* • U.S. EPA finalized rules Dec. 20, 2012 • Establishes three-year compliance window** • Facility owners’ choices:
– Add environmental controls/ retrofits to existing boilers – Replace oil/coal boilers with natural gas boilers – Consider installing new CHP as a natural gas option – Shut down/move
Coal-Fired Plant Retirements • Localized grid constraints • Reduced capacity
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How CHP could help Ohio
• Create distributed generation in pockets of electricity constraint
• Provide “Island of Power” during outages: -- for sensitive/critical organizations including hospitals, data centers, others -- black start capabilities for everyone else
• Eliminate or defer investment in “t” and “d” • Assist industries in developing cost-effective
emission compliance strategies (Boiler MACT) • Expand customer choices to remain economically
competitive (i.e. retaining businesses and jobs in Ohio)
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Boiler MACT Affected Boilers in Ohio
Fuel Type Number of Units
Capacity (MMBtu/hr)
Coal 48 10,015 Heavy Liquid 6 743 Light Liquid 16 5,112 Biomass 7 1,448 Process Gas 6 2,003 Total 83 19,321
industrial, commercial and institutional boilers only Source: EPA Information Collection Request
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Potential Coal-fired Plant Replacement?
ACEEE 12-state study (Fall 2012): • CHP can help replace generation lost to retired coal
power plants.
• The CHP technical potential in those 12 states alone is more than enough to offset all coal retirements nationwide.*
* Study did not overlay specific locations of CHP technical potential with specific locations of retiring coal utility power.
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CHP can be cost-effective choice
Costs for new 20 MW plants (ACEEE , September 2012)
$- $0.02 $0.04 $0.06 $0.08 $0.10
Natural-Gaspowered CHP
Natural-gaspowered combined
cycle
Nuclear powerplant
Levelized cost per KWh
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Genesis of PUCO/US DOE Partnership
• September 2011: Ohio Gov. John Kasich hosts energy summit and expresses interest in promoting CHP for its economic and environmental benefits.
• Winter 2011: U.S. DOE, through the Midwest Clean Energy Application Center, offers to pilot technical assistance to boiler operators in Ohio.
• February 2012: PUCO adopts resolution in support of the DOE pilot and becomes the first state to participate.
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PUCO’s Role and Commitment
From PUCO resolution, February 2012: – Identify boilers in areas of potential constraint as
priorities for U.S. DOE educational efforts – Work with PJM Interconnection to understand how
new CHP could be incorporated into markets – Help boiler owners connect with U.S. DOE and
utilities – Facilitate information sharing with other state
agencies (OEPA, ODOD, ODNR) – Seek opportunities to remove educational and
regulatory barriers to voluntary adoption of cost-effective CHP
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US DOE’s Role and Commitment
Provide site-specific technical and cost information to facilities that are burning coal or oil in their boilers and are affected by EPA Boiler MACT Rules. • 40+ major source facilities (~ 90 to 100
boilers) in Ohio • Share information on financial incentives
available at the local, state, utility and federal levels as well as private financing
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Removing Educational Barriers
CHP 101 Workshop (3/9/12): • Target Audience – MACT boiler owners • DOE Technical Assistance Program • Ohio EPA on MACT rule • Examples of successful CHP in Ohio • PJM market overview • DR opportunities in PJM
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Removing Educational Barriers
CHP Case Studies Workshop (6/20/12): • Target Audience – MACT boiler owners • CHP 101 • Two Medical Centers • Wastewater Treatment Plant • Landfill • Coke Plant • Chemical Plant
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Removing Educational Barriers
Financial Tools Workshop (8/2/12): • Target Audience – MACT boiler owners • Federal and State tax policies • State Financing Program • Fuel Procurement Hedging • Debt, Developer, Equity Financing • EPA Spark Spread Tool • Project Cost Screening Tool
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Removing Educational Barriers
Training Natural Gas Utility Key Account Reps (12/7/12): • Target Audience – Gas Utility Key Account Reps • Understanding Fundamentals of CHP • Why CHP Can Bring Value to Your Customers • Recognizing CHP opportunities in Your Customers’ Facilities
• Finding Assistance For Your Customer Once CHP Potential is Identified 15
Removing Regulatory Barriers
Stand-by Rates Workshop (9/13/12): • Target Audience – MACT boiler owners,
developers, utilities, all stakeholders • Introduction to Stand-by Rates • Existing Stand-by Rates in Ohio (RAP) • Best Regulatory Practices (NRRI)
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Removing Regulatory Barriers
PUCO Rulemakings and Comment Opportunities: • Target Audience – MACT boiler owners,
developers, utilities, all stakeholders • Interconnection, Case No. 12-2051-EL-ORD • Net Metering, Standard Market-Based Rate for
Energy and Capacity for Co-Gen, Case No. 12-2050-EL-ORD
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Results: Outreach & Education
385 people attended 5 CHP workshops at PUCO 405 people joined the PUCO listserv on CHP 3,500 unique page views of our CHP web page for:
-- Archived workshop webcasts -- Existing and potential CHP facilities in Ohio -- CHP rulemakings and tariffs -- Technical assistance and reports
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• Over 50 companies contacted • 12 feel they are already in compliance • 6 no longer in business • Analyses for 15 in various stages • All companies are now aware of how CHP can
assist in a compliance strategy • U.S. DOE will continue to track results of
technical assistance
Results: Boiler MACT Technical Assistance
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Ohio’s Legislative Support of CHP Senate Bill 315, Gov. Kasich signed June 2012: • CHP and waste energy recovery can be counted toward the state’s Energy Efficiency requirements.
• Waste energy recovery facilities qualify as renewable energy sources under Ohio’s Alternative Energy Portfolio standard.
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What did we learn?
Successful CHP applications operate in Ohio
University of Cincinnati Central Utility Plant
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What did we learn?
Pay-back horizons are best suited to institutional or governmental boiler operators. Joint ventures work for private industry.
Ashtabula, Ohio joint venture: Millenium Inorganic Chemicals and Duke Energy Generation Services
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What did we learn?
• Financing is project specific and owners often use consultants to pursue best options
• Standby tariffs must be updated to reflect current conditions
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What’s ahead for CHP in Ohio
• Market-specific newsletters created by Midwest CEAC and PUCO
• Rules updates
• Midwest CEAC implementation assistance when an owner chooses a CHP solution
• Additional training opportunities as topics and interests develop
• Open invitation from U.S. DOE for additional ways they can assist PUCO
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For More Information
Public Utilities Commission of Ohio: Matt Butler, Administrative Officer [email protected] 614-644-7670 [email protected] http://www.puco.ohio.gov/puco/index.cfm/industry-information/industry-topics/combined-heat-and-power-in-ohio/ Midwest Clean Energy Application Center: John Cuttica, Director, Energy Resource Center [email protected] 312-996-4382
http://www.midwestcleanenergycenter.org/
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For More Information
U.S. Department of Energy Katrina Pielli, Senior Policy Advisor, Acting CHP Deployment Lead [email protected] 202-287-5850 Boiler MACT Technical Assistance Program http://www1.eere.energy.gov/manufacturing/distributedenergy/boilermact.html
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References
• “Coal Retirements an the CHP Investment Opportunity,” Anna Chittum and Terry Sullivan, American Council for an Energy-Efficient Economy, September 2012 http://www.aceee.org/research-report/ie123
• “FACT SHEET: Adjustments for Major and Area Source Boilers and Certain Incinerators,” U.S. EPA, December 2012 http://www.epa.gov/airquality/combustion/docs/20121221_sum_overview_boiler_ciswi_fs.pdf
• “President Obama Signs Executive Order Promoting Industrial Energy Efficiency,” The White House, August 2012 http://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiency
• “Natural Gas Key Account Reps Training for Combined Heat and Power,” John Cuttica and Cliff Haefke, Midwest Clean Energy Application Center, December 2012
• “Annual Energy Outlook 2013 Early Release Overview,” U.S. Energy Information Administration, December 2012 http://www.eia.gov/forecasts/aeo/er/pdf/0383er(2013).pdf
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