District Energy Now
Volume 13 Number 8 March 1998
Welcome New Members!
We hope you will join us in welcoming the following new members of IDEA!
Calendar of Events
Euroheat & Power District Heating Seminar
March 26-27, 1998
Hotel Yugoslavia, Belgrade
Contact: Peter Vasiljevic, +381 11 318 6708
89th Annual IDEA Conference & Trade Show
June 13-16, 1998
San Antonio Convention Center & Hilton Palacio del Rio Hotel, San Antonio, Texas
Contact: IDEA, (202) 429-5111
13th Annual IDEA Cooling Conference
October 7-9, 1998
Colonial Williamsburg, Virginia
Contact: IDEA, (202) 429-5111
Pennsylvania Governor Releases Nearly $3 Million for Penn State Projects
Calling Penn State University one of the gems of Pennsylvania’s network of institutions of higher learning, Governor Tom Ridge released nearly $3 million in state capital budget funds for projects at two Penn State University campuses.
Ridge released $1.82 million for renovations to Penn State’s Animal Diagnostic Laboratory and Incinerator at the University Park campus in State College. The facility’s renovations and construction will include additional laboratory space and improved bio-security features.
Ridge also released $1.4 million to replace the underground heating system at Penn State’s Harrisburg campus. He said the Harrisburg campus heating system is deteriorated beyond repair and is in a state of imminent failure. The new district heating distribution system is designed to provide service to the existing complex, as well as accommodate future expansion.
Full Steam Ahead for Duquesne University Energy Center
Two years ago, Duquesne University and Equitable Resources, Inc. (ERI), announced the establishment of the area’s first total energy service partnership with an educational institution.
Today, a completely refurbished, state-of-the-art, five megawatt natural gas fired cogeneration facility, known as the Duquesne University Energy Center, consolidates energy systems and is producing 23,000 pounds of steam per hour, 6,166 horsepower (electrical) and 6,530 horsepower (mechanical). In consumer terms, that’s roughly equivalent to the energy needs of 5,000 homes. Its cooling towers provide a total condenser water flow capacity of 9,200 gallons per minute.
This energy system provides up to 80 percent of Duquesne’s electrical needs, using the thermal energy produced for most of the campus heating and cooling needs.
The center incorporates additional cooling capacity to accommodate future needs without incurring additional capital costs. A chilled water system eliminated inefficiencies and environmentally damaging chlorofluorocarbons (CFCs). The combination of the energy and water systems within the energy center makes the campus virtually chlorofluorocarbon free.
The $9.6 million project was completed ahead of schedule and on budget. But those are only two of the factors that make the Duquesne University/ERI Services partnership a success, according to Dr. John E. Murray, Jr., president of Duquesne University. "Duquesne faced a number of problems," he said, "not the least of which was soaring electricity costs. At the same time, the university was operating an outmoded, decentralized physical plant and had to eliminate CFCs.
It is estimated that the university will save approximately $750,000 annually on energy costs, plus a reduction in operating expenses through the centralization of services.
Laboratory Construction Underway in Canada
The Ecole de technologie superieure in Montreal (Engineering school) developed jointly with CCUM (district energy corporation in Montreal) a project to construct a laboratory for the development and the testing of heat transfer technologies and devices.
"As far as we know, no research facility of this kind currently exists in North America for research and test on valves, expansion joints, heat exchanger, steam traps, insulation products, meters and pump, says Yves Blanc, General Manager, CCUM. "We consider that a full size test bench will be very useful for our industry and our customers. The European experience shows that such a test bench is very useful."
The tasks of the laboratory will be to conduct research for new products development, efficiency assessment, and "life-cycle wearing test". Research project will be of both type: public results research and private industry-university project (results restricted to the company which will have paid for the research).
The research center will be built by Ecole de technologie superieure on its campus in Montreal. The principal energy resources will be the steam at the pressure up to 375 PSIG and the hot water at the temperature up to 150°C. In a second step, the laboratory will develop a facility extension for chilled water equipment.
All devices using the steam and the hot water, such as heat exchangers, steam traps, control valves, etc., could be tested in this laboratory. The capacity of the tested devices will be up to 5000 MBH (1465 kW). Further, a climatic test chamber will be installed in the laboratory. This chamber will allow to perform tests at low temperatures (up to 30C). The aims of the laboratory are to conduct industrial research and to become an Education Center in this domain. Moreover, the realization of the industrial research contract will be the priority of the laboratory. Hopefully, research projects will come from companies located all over North America.
The partners are looking for the following:
1. Suggestions for the name for the laboratory
2. Names of companies that could be interested in sharing the initial funding. The investment cost is about $600,000 (Canadian dollars). Governments, Ecole de technologie superieur, CCUM, Gaz Metropolitain (natural gas utility in Quebec) have already committed themselves for grants that total $500,000. For the balance ($100,000), they are looking for sponsorships from US and Canadian corporations manufacturing such equipments. (Money from corporate users of such equipments will also be welcome).
Please contact Professor Stanislaw Kajl, Ecole de technologie superieure, at <skajl@mec.etsmtl.ca> or Yves Blanc, CCUM, at <Yblanc@ccum.com> if you would like more information.
The Energy Network Adds Customers to Its District Heating and Cooling System
CTG Resources, Inc., the holding company of The Energy Network (TEN), has contracted to provide steam and chilled water service to 280 Trumbull Street for the next 25 years.
"We are excited about this opportunity and we look forward to converting this building and adding it to the District Heating and Cooling system," says Arthur Marquardt, president and chief operating officer of CTG Resources, Inc. "Part of our long-term vision is to build on our nonregulated business, and we are doing just that."
The 664,000 square-foot building houses the offices of CIGNA Financial Services, Robinson and Cole, and the First National Bank of New England. The building will be TEN’s largest conversion customer ever and the fourth largest building on the system. The conversion to the DHC system, vs. the current on-site plant, is expected to provide significant energy savings to the building owners.
TEN also recently signed an agreement to provide steam heat to the City Steam Brewery Cafe, which is located in the Richardson Building on Main Street. City Steam brews its beer using steam. According to City Steam’s brewmaster, Ron Paige, this method enables the brewery to maintain the highest standards of quality.
Trigen Acquires Power Sources in $63 Million Deal
Trigen Energy Corporation has purchased Power Sources Inc. (PSI), a biomass-to-energy developer and operator based in Charlotte, North Carolina. PSI has grown from owning and operating two energy facilities in 1992 to seven in 1997, with annual revenues of $17.9 million last year. On a proforma basis, PSI would have increased Trigen’s 1997 thermal energy revenues by about 10%. PSI’s current customers, all under long term contracts, include Baxter Healthcare, Kimberly Clark, Cargill, Sara Lee/National Textiles LLC and Broyhill Furniture.
In addition, a 15-year contract has been signed to sell steam for a new project at the Gilman Paper facility in St. Mary’s, Georgia. The agreement calls for construction of a new plant for the processing and combustion of wood and paper waste into steam, with anticipated first full year revenues of approximately $5 million. Construction of the new facility is expected to take 18 months.
All PSI plants product energy from renewable biomass fuels including wood residues, rice hulls, cotton waste and paper mill sludge. Much of the fuel PSI uses would otherwise go to a landfill and decompose into CO2. The acquisition of this growth company with biomass expertise and the immediate efficiency increases from deploying Trigen Ewing turbines help meet Trigen’s mission to provide competitively-priced energy and to mitigate global warming by reducing fossil fuel consumption and lowering CO2 emissions.
Toyota, 2 Others to Make Small Cogeneration Systems
Toyota Motor Corp. announced a plan to produce small cogeneration systems with two affiliated companies. Cogeneration is the process of generating electricity and steam or heat from the same source.
Japan’s top automaker will initially market systems with output of less than 1,000 kW. Powered by gas turbine engines, the systems are more efficient than their larger counterparts, company officials said.
Sales will be targeted mainly at commercial buildings, hospitals and hotels.
On April 1, the carmaker will set up a joint venture with Aisin Seiki Co. and Aisan Industry Co., capitalized at 800 million yen. Toyota will put up 70% of the capital, with Aisin Seiki contributing 20% and Aisan Industry the rest.
The partners target first-year sales of 1 billion yen, growing to 12 billion yen by 2002. The venture will start operations with a work force of 45.
Reno Energy Project Receives Nevada Public Utilities Commission Approval
U.S. Energy Systems, Inc., announced that the Reno Energy Geothermal District Heating project in which the Company holds a note convertible into a fifty percent equity interest has received Compliance Order approval from the Nevada Public Utilities Commission. In a separate action, the project was granted its Special Use Permit from the Washoe County Planning Commission. The Company has participated in the funding of the developmental stages of the project since its inception last year.
When completed in mid-1999, Reno Energy will be one of the largest district heating facilities in the nation and also one of the largest geothermal district heating operations in the world. In its initial phase, Reno Energy will pump geothermally heated hot water to the South Meadows Business Park and the Damonte Ranch Development which initially will comprise approximately 40,000,000 square feet under roof, and which are located within a three mile radius of Reno Energy’s geothermal well resources. The hot water will be used for heating, hot water supply, industrial process heat, and chilled water production.
The Reno Energy project can use excess geothermal heat from two geothermal electric power plants owned by the Company and two other geothermal electric power plants owned by Steamboat Development Corp., an equity owner in Reno Energy. In order to assure sufficient supplies of geothermal heat for the project in both its initial and future phases, the Company is also participating in the acquisition of an additional 120 acres of geothermal fields with substantial heat resources adjacent to the proposed facility.
Consolidated Edison Rings in New Era
The oldest continuously traded company on the New York Stock Exchange marked its emergence into a new era, January 27, when Consolidated Edison, Inc. Chairman Eugene R. McGrath stepped onto the podium above the Exchange floor and flipped a giant, specially designed light switch to ring the day’s closing bell. The ceremony recognized the formation earlier this month of Consolidated Edison, Inc.--a new holding company and corporate parent of Con Edison and three other wholly owned subsidiaries.
Con Edison’s corporate predecessor, the New York Gas Company, was incorporated in 1823. When it began trading on the New York Stock Exchange the next year, James Monroe was President of the relatively new United States, Europe was recovering from the Napoleonic wars and Abraham Lincoln was a teenager in the wilderness of Illinois. Homes, factories and streets were illuminated by gas lighting some 60 years before Thomas Alva Edison would forever change New York City--and the world--with the operation of the first electric generating station, on Pearl Street in lower Manhattan.
Chairman McGrath noted that the newly restructured company’s celebration at the Exchange underscores Con Edison’s commitment to build upon the solid foundation it has achieved over the past 175 years, in serving the needs of customers and investors.
"On the occasion of Chairman McGrath’s visit and the start of a new era for our longest, continuously listed company, the New York Stock Exchange salutes Con Edison as an innovator and leader in the energy industry," said Richard A. Grasso, chairman and CEO of the New York Stock Exchange. "Looking back at the many ways that Con Edison has helped transform and brighten New York since 1823, I can only say, Thomas Edison would be proud."
Energy Use, Carbon Emissions Continue to Rise in New EIA Forecast
Total energy consumption in the United States is expected to increase by 27% over current levels by the year 2000. The Annual Energy Outlook 1998 also projects that higher energy consumption will be reflected in higher carbon emissions.
The higher projections for both energy consumption and carbon emissions result in part from higher projected economic growth and lower electricity prices. Higher demand is projected in all sectors; however, increased demand by automobiles and other modes of travel contributes more than half the increase.
Lower energy prices partially result from restructuring and competition in the electricity industry, where a 20% decline in average electricity prices is expected by 2020. Average electricity prices decline from 6.9 cents per kilowatthour in 1996 to 5.5 cents per kilowatthour in 2020.
Colder than Average Weather Fuels Greenhouse Gas Emissions Rise in 1996
Emissions of carbon dioxide increased by 3.5% in 1996 compared with 1995, to almost 1.5 billion metric tons. Emissions of the principal greenhouse gases as a group (carbon dioxide, methane, nitrous oxide, and certain other gases) increased by 3.4%, to a total of 1.75 billion metric tons of carbon equivalent. U.S. national emissions in 1996 were 8.3%, or 135 million metric tons of carbon equivalent, higher than in 1990.
Readership Survey to Appear in 2nd Quarter District Energy
Keep you eyes peeled for a readership survey that will appear in the 2nd Quarter issue of District Energy. We are looking to revamp the magazine in the next year and need your input!!!! Please take the time to fill out the survey and return it to IDEA.
Administration Proposes Tax Credit for CHP
President Clinton has proposed a 10% investment tax credit for Combined Heat and Power (CHP) systems. CHP systems supplying thermal energy to district energy systems should qualify for the credit, subject to efficiency criteria. Planned federal expenditures for the CHP tax credit are $942 million over five years. The CHP tax credit was part of a package of energy-related tax incentives announced on February 2.
IDEA has worked closely with Department of Energy and Environmental Protection Agency staff and other private sector organizations in a working group focusing on CHP. This government/industry working group concluded that the most appropriate tax measure would be a uniform 7-year depreciation for CHP. In addition, there was support for extending this treatment to the distribution infrastructure to move the cogenerated thermal energy to users. However, the Treasury Department rejected the entire depreciation proposal and instead opted for an investment tax credit for CHP.
For CHP systems with an electrical capacity of 50 megawatts or less, the total energy efficiency of the system would have to be greater than 60%. For larger systems, the total energy efficiency would have to exceed 70%. Qualifying systems would also have to produce at least 20% of its total useful energy in the form of thermal energy, and at least 20% of its total useful energy in the form of electric and/or mechanical power.
Tax Credits for Building Equipment Proposed
Another provision in the administration’s tax package which is potentially significant for the district energy industry provides tax credits for purchase of energy-efficient building equipment, including fuel cells, electric heat pumps, natural gas heat pumps, central air conditioners and natural gas water heaters. To qualify the equipment must meet minimum efficiency criteria.
IDEA Working with Government and Private Sector on Climate Change
IDEA has been actively involved in climate change policy development, working closely with government and other private sector organizations to identify policies and programs to accelerate the implementation of Combined Heat and Power (CHP) and district energy. In addition to tax provisions (discussed above), a key focus has been on changing air quality regulation to recognize and reward the air quality benefits of CHP and district energy. Increasing attention is now being placed on development of programs to overcome informational barriers which inhibit implementation.
IDEA is working with government staff and other private sector players on an ongoing basis to:
- strengthen awareness of the role that district energy can play in implementing CHP;
- emphasize that district energy provides multiple opportunities to increase efficiency and reduce emissions above and beyond its contribution to CHP;
- advocate programs to encourage implementation of district energy;
- explore attitudes toward potential organizational locations for possible district energy activities; and
- reinforce support for our recommended approach to output-based standards in the model rule now being developed by EPA for a multi-state cap and trade program for oxides of nitrogen.
TransAlta’s Bright Example
Among the unsung heroes of the recent ice storm crisis are Dwayne Simmons and his staff at TransAlta Corp.’s cogeneration plant in Ottawa.
At the height of the storm, Simmons got a call from Ontario Hydro to feed all the power the plant could muster into the provincial utility’s grid. That amounted to 70 MW, not enough for Ottawa’s electricity needs, about 800 MW, but enough to supply 90,000 homes.
The plant uses a natural gas turbine to generate electricity, which is sold to Ontario Hydro to feed the province’s electricity grid. Its energy byproducts--steam and hot water--are sold to heat the Ottawa Health Sciences Centre and the National Defence Medical Centre.
Throughout the emergency, TransAlta’s power propped up the grid in the Ottawa area after a main 500 MW transmission line linking the Lennox generating station to Ottawa went down. "We were running flat out through the whole situation," says Simmons.
Several transmission lines feed power to the capital; as they were knocked out by the storm, there were limitations on the load the remainder could carry.
"If TransAlta supports a portion of that, Ontario Hydro has more flexibility in the way they manage the lines that are still up. We were supporting them by being available. The fact we were doing that in Ottawa, where getting power into the city was questionable for some time, was cream on the cake. It justifies our existence there," says Simmons.
The company’s role during the ice storm proves the advantages of a distributed generation system that relies on many relatively small generators widely dispersed, says Jake Brooks, executive director of the Independent Power Producers’ Society of Ontario. "Distributed power systems are less vulnerable to disruptions of either single generators or major transmission lines."
NYSERDA Issues Pattern and Trends: A Profile of Energy in New York State
Despite increased energy consumption in 1996, New York State continued its tradition of being the most energy-efficient state, on a per capita basis, in the continental United States. This according to Patterns and Trends, an annual report of energy statistics released by the New York State Energy Research and Development Authority (NYSERDA). The report provides an overview of energy production, consumption, supply sources, pricing, and expenditure patterns from 1982 through 1996. In addition, it provides county-by-county estimates of on-highway motor gasoline consumption.
If you would like to obtain a copy of this report, contact IDEA at (202) 429-5111.
Gray Delivers Presentation to House of Commons
John A. Gray, former IDEA President and consultant for BetzDearborn, delivered a presentation to the House of Commons Standing Committee on Environment and Sustainable Development, Ottawa, Ontario, Canada on February 4, 1998.
In his speech, he noted that new district energy plants in Canada that are now in operation include:
- Charlottetown, Prince Edward Island--Biomass & Municipal Waste Fired
- OUJe--Bougoumou Quebec--Biomass Fired
- Fort MacPherson Alberta--Cogeneration
- Cornwall Ontario--Cogeneration
- Windsor Ontario--Heating & Cooling and Ice Storage
He also mentioned that the following active district energy plants are under development:
- Sudbury, Ontario--Cogeneration
- Hamilton, Ontario--Waste Heat from Industry
- North Vancouver, British Columbia--Waste Hydrogen or Heat Pumps
- Revelstoke, British Columbia--Biomass Waste
- Fort Smith, Northwest Territories--Surplus Hydro Electric
- Halifax, Nova Scotia--Cogeneration
- New Glasgow, Nova Scotia--Biomass or Cogeneration
- Toronto, Ontario--Deep Lake Cooling
- Fort Simpson, Northwest Territories--Cogeneration