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Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with RSA Engineering Dick Armstrong, PE, CEM Kittelson & Associates HMS Strategic Economics UMED District Plan Update ML&P Meeting August 27, 2013

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Page 1: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

Municipality of AnchorageCommunity Development DepartmentKristine Bunnell, Project ManagerCarol Wong, Manager, Long Range Planning

Page & TurnbullwithRSA EngineeringDick Armstrong, PE, CEMKittelson & AssociatesHMS Strategic Economics

UMED District Plan Update

ML&P MeetingAugust 27, 2013

Page 2: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

STAKEHOLDER-DESIRED PLAN

Designated as a Major Employment Center in Anchorage 2020

District Planning and Zoning State Grant Application

No Federal or Muni Funds

GRANT REQUIREMENTS

Community Involvement Plan UMED District Plan Update Parking Utilization Study Energy Cogeneration Study

UMED District Plan Update | What and Why Now?

Page 3: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

UMED Cogen Study Purpose

– Validate UAA/MLP 2008 Plan and Update• Centralized 10 megawatt (MW) CHP Gas Turbine Plant • Utilidors to distribute waste heat: $55M just UAA & PAMC,

$63M with UAA Dorms• Location for a centralized plant – UAA or APU near PAMC• Limited distribution to only UAA, APU and PAMC

– Evaluate Alternate Solutions of Distributed CHP Systems at:● PAMC ● UAA

● UAA Dorms ● MYC

● SCF ● ANTHC

● APU ● API

– Define Major Constraints:• Tariff relief for demand charges• Code restrictions• ML&P safety concerns• Enstar concerns

Page 4: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

DISTRIBUTED COGENERATION DEFINED:

Electricity and Heat production that is on-site or close to the load center and is interconnected to the utility distribution system.

Page 5: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

WHAT IS A MICRO TURBINE?

In layman's terms, “A miniature jet engine that runs at speeds up to 96,000 rpm and generates electricity and heat.

• Electrical Power Output• 30 kW to 100 MW range

• Highly Reliable• Ultra Low Emissions• Multiple Fuels

• natural gas, propane diesel, biodiesel, methane/biomass/liquid fuels

• Simple/Cost Effective Design• Very Low Maintenance

Combustionchamber

Exhaust output

Recuperator

Fuel injector

Air bearings

Compressor

Generator

Air intake

Cooling fins

Turbine

Page 6: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

MICROTURBINES VS PISTON ENGINES

Microturbine Traditional Piston Engine

Ultra low emissions Local air permits and exhaust cleanup required

Low maintenance – Six hours per year High maintenance – Oil, Coolant, Injectors-160 scheduled maintenance periods in 5 years

On board digital electronics External controls without power electronics

Integrated utility protection & synchronizing Requires external relays & control equipment

Lightweight & small footprint More than twice the weight & footprint

Page 7: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

WHY CHP?COMBINED HEAT AND POWER

Page 8: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

Equipment Basis of Analysis

• Capstone Micro Turbines Used for Analysis– 2 major suppliers analyzed

• Capstone: Represented locally• Flex Energy: Not represented locally

• Capstone has 3 Size Offerings: 30 kW, 65 kW, 200 kW, Multiples

• Flex Energy has 250 kW, Multiples

• Capstone Fuels Selection: Liquid & Gas (diesel, jet fuel, propane, NG)

• Flex Energy: Only NG, Propane

• Capstone has Direct Drive, 1 Moving Part, Air Bearings, Low Maintenance

• Flex Energy Requires Gearbox, Lubricants, More Maintenance

• Both Allow Dual Mode – Standalone or Grid Connected

• Flex Energy Requires 8 hrs Maintenance/year, Capstone Requires 6

• Both Have Extremely Low NOX Emissions Due to Lean Fuel Mixture

Page 9: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

Capstone C30No Heat Exchanger Installed

Exterior Installation at Cell Tower in Alaska

C200’s Cascaded for 1,000 kW total

10’ x 30’

Page 10: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

Example CHP Alaska Locations

• Remote cell towers off grid – Portage: 1 C30– Homer: 1 C30 – Tazlina: 1 C30

• H2 Oasis Water Park – 1 C65 and 3 C60s

• Miscellaneous other locations– Alyeska Prince Hotel in Girdwood– Fairbanks: 1 C65 – Montana creek DOT station (Mile 82 Steese Highway) 1 C65– Kenai Peninsula (Fort Beluga, Kenai, Happy Valley, Nikiski, Ninilchik): 5 C30’s, – 4 C60’s, 14 C65’s, 4 C200’s, (this fall 2013: 2 C1000’s)– Shemya: 7 C65’s

• Being Installed Now– Oliktok Point: 4 C30’s (Diesel) US DOE Atmos. Radiation Meas. Program

Page 11: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

Normal (Base) Mode

Page 12: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

Potential Roadblocks to Implementation

• ML&P Interconnection requirements (113) state that cogen units cannot connect to the user’s load, but must be sold back to utility.

– CEA allows the customer to connect a CHP unit on the load side of the meter which reduces their demand charges.

– Financial incentive to use CHP is significanty reduced if customer cannot reduce his demand charges

• Power Back Feed to Grid Concerns

– Interconnecting disconnect device allows for non-utility generation lockout

• Utility Power Quality Concerns

– Protective relays are required to continuously analyzed both the load and the grid to isolate non-utility generation in the event of system disturbances.

• Finding Room Inside Existing or Outside Building for Installation

• Code Restrictions: NFPA, Building Codes, Utility Restrictions

Page 13: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

Code Restrictions for Use of Micro-Turbines (Sample)

• NFPA 37: Std for Installation & Use of Gas Turbines– Adopted by reference in 2012 IFGC 616– Adopted by reference in 2012 IMC 915

• Key Provisions (not all inclusive)– Locate where accessible for fire fighters – NFPA 37, 4.1.1.1– No combustible materials stored in room – NFPA 37, 4.1.1.3– Interior walls, floors, ceilings must be 1-hour construction,

except top floor – NFPA 37, 4.1.2.1.1– Ventilation adequate to prevent build up of gasses – NFPA 37, 4.1.2.1.3– Attached engine rooms need 1-hr wall where attached to structures – NFPA 37, 4.1.2.1.4– Noncombustible construction on detached structure – NFPA 37,4.1.2.2.1– Keep detached structures 5’ from main building – NFPA 37, 4.1.4– Natural gas supplies, piping, gas trains, regulators – NFPA37, 5.1– Exhaust systems – NFPA 37, Chapter 8– Controls & Instrumentation of turbines – NFPA, Chapter 9.3– NFPA Chapter 11

• IEEE 1547: Interconnection of Distributed Resources w/grid– Adopted provisions by serving utility– Includes protective relays, utility manual disconnects

Page 14: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

ML&P Issues• Rates for purchase of Energy:

– Non-Firm Power Rate $0.03548 /kWh

ML&P Interconnection Guidelines

113 Class C Facilities

Non-utility generator installations from 100 kVA to 1,000 kVA, where the stiffness ratio is at least 30, are Class C installations. The larger capacity of Class C facilities (relative to Classes A and B), and the consequent potential to island large sections of the ML&P electric system is of much greater concern. In addition, Class C installations can significantly influence primary feeder devices and operations.

Class C installations shall have the producer’s non-utility generation equipment connected directly to the ML&P electric power system. Class C installations shall not serve any of the producer’s load(s) normally served by ML&P.

CEA Interconnection Guidelines 163 Class C Facilities Non-utility generator installations of 100 kVA to 1,000 kVA, where the stiffness ratio is at least 30, are identified as Class C installations. Given the larger capacity of Class C facilities (relative to Classes A and B), the potential to island large sections of the Chugach electric system is of much greater concern. In addition, Class C installations can significantly influence primary feeder devices and operations. Accordingly, the probability of interference with Chugach consumers and system equipment is high enough to necessitate more stringent interconnection requirements.

Page 15: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

ML&P Does NOT Permit Connecting CHP to Building Load

Page 16: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

CEA Allows Connecting Cogen to Building Load

Page 17: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

Demand Savings – Single 200 kW CHP

Minimum Monthly Charge $12.88

*Single or three-phase 60 Hertz alternating current at 120/240, 120/208Y, 208Y/120, 240/120, or 408Y/277 volts as available.

General Service: Large at Secondary Voltage

Any service with a demand exceeding 20 kW for three consecutive months and metered at secondary voltage.*

Schedule 22

(Monthly Charge)

Customer Charge $ 44.15

Demand Charge $ 13.64 /kW

Energy Charge 3.8840 ¢ /kWh

Cost of Power Adjustment 2.974 ¢ /kWh

Regulatory Cost Charge 0.0578 ¢ /kWh

Total Per kWh 6.9158 ¢

MOA Underground Surcharge 2% on all charges/rates except RCC

Minimum Monthly Charge $44.15

*Demand is determined by using the maximum average rate of energy use for any 15-minute interval. The billing demand shall be the greater of the following: the recorded maximum demand for the month, or 80 percent of the maximum demand recorded during the preceding 11 months, or the customer demand, under a special contract for a customer with on-site generation.

200 kW CHP could reduce demand charges by $ 32,736/year

Page 18: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

Demand Savings – Single 200 kW CHP

General Service: Large At Primary Voltage

Any service with a demand exceeding 20 kW for three consecutive months and metered at Primary Voltage.* The following monthly rates are subject to adjustment each quarter and are based on the total kWh usage.

Schedule 23

(Monthly Charge)

Customer Charge $ 159.55

Demand Charge $ 15.34 /kW

Energy Charge 3.6580 ¢ /kWh

Cost of Power Adjustment 2.974 ¢ /kWh

Regulatory Cost Charge 0.0578 ¢ /kWh

Total Per kWh 6.6898 ¢

MOA Underground Surcharge 2% on all charges/rates except RCC

200 kW CHP could reduce demand charges by $ 36,816/year

Page 19: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

• Enstar G4 rate – Natural Gas– $360/mo. customer charge– $.6306/ccf

• ML&P Schedule 22 rate - Electric– $44.15/mo. customer charge– Demand $13.64/kW– $.07053/kWh

• 200 kW CHP• Dual Mode Operation• Heat Recovery Module• Electric Adsorption Chiller, 1.3 COP• $445,000 Installed Cost• Hydronic Heating, Electric Cooling• 8760 hrs/year Electricity Generation• Base Electric Load Exceeds

CHP Capacity– Electric output is fully utilized

• CHP is Connected on Load Side of Meter to Reduce Demand Charges

Sample Office BuildingAssumptions for Economic Analysis

Page 20: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

Sample Office Building Result Summary

Page 21: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

• Project SummaryProject Information

Company Name

Facility Description

Facility Location

Date of Analysis 10-Aug-13 Prepared By

Benefits Summary Calculations include benefits from:

10 yr IRR 24.7%

10 yr NPV $405,405

Payback Period [Years] 3.72

Discount Rate 8.0%

5 Year Cash Flow AnalysisInitial Year 1 Year 2 Year 3 Year 4 Year 5

Net Investment ($445,000)

Total Annual Benefits $260,632 $265,845 $271,162 $276,585 $282,117

Fuel & O&M Costs ($144,938) ($147,437) ($149,986) ($152,586) ($155,239)

Net Cash Flow ($445,000) $115,695 $118,408 $121,175 $123,998 $126,878

Discounted Cash Flow ($445,000) $107,125 $101,516 $96,193 $91,143 $86,351

Equipment, Investment, and Operating Summary

Capstone MicroTurbines 1 x 200 200 kW

Configuration 200R-FD4-BU00 138,700 kWh per Month

Fuel Source LP Natural Gas $0.127 $/kWh

64 using EPA data

Total Installed Cost ($445,000)

Installation/Equipment Rebates $0 Microturbine 8,760 52.0% Overall Total

Avoided Equipment Costs $0 Heat 3,624 62.6% during Heat

Financing/Tax Credits $0 Cooling 2,002 65.9% during Cooling*

Net Investment ($445,000) * using thermal input, not cooling output 41.8% FERC

Total System Power Rating

Operating Hours/Year Efficiency [LHV]

Equivalent Cars Removed

Avg Monthly Generated Power

Avg Price of Offset Utility Power

UMED Generic Sample CalcGeneric UMED building using 200 kW micro-turbineAnchorage AK - UMED District

Electricity Production; Heat Cogeneration; Cooling;

Richard S. Armstrong

Page 22: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

UMED CHP Stakeholder Options

1. Do nothing

2. Base load CHPs to feed heat & power to building.**

3. Size CHPs to feed heat, power to ML&P grid – no demand reduction

4. CHPs in buildings that can be totally off grid via backup generation, or ML&P backup with open transition transfer switch. Pay 12 months demand at ($13.64/kW to $15.64/kW) if using ML&P for >15 minutes.

5. Carry the entire facility campus using CHP generators, interconnected using smart grid to meet all thermal loads, and maximize efficiency by turning down lightly loaded units. Provide backup using diesel micro- turbine or existing diesel recip generators. Completely sever connection to ML&P, or work out a mutual backup agreement.

6. Pick 1-2 buildings per stakeholder to test a proof of concept CHP to determine if they integrate to the system, work as desired and save as expected.**

** Requires Interconnection Requirements Section 113 relief from ML&P

Page 23: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

Recommendations

• Request that ML&P remove Interconnection Requirement Section 113 that prohibits demand reduction and requires selling all power back to ML&P. Permit connection of CHP on customer side of meter.

• Size distributed CHP units to pick up thermal loads, use power as base load and demand reduction.

• Priority locate CHP units in high thermal load buildings.

• Consider smart grid variable loading in primary metered locations.

• Use steam micro-turbines if high pressure steam (150 psi) is available to be reduced to 15 psi.

Page 24: Municipality of Anchorage Community Development Department Kristine Bunnell, Project Manager Carol Wong, Manager, Long Range Planning Page & Turnbull with

Stakeholder Feedback

• Most Want to Try a Proof of Concept CHP Unit

• Example Potential POC Locations:– Native Hospital mechanical room using steam micro turbine– SCF data room– UAA Integrated Science building– UAA Sports Complex– UAA Energy Modules– APU Mosley Pool Building– API boiler room– MYC boiler room– PAMC boiler room

• Most Prefer to Base Load CHP, Sized to Pick up Thermal Load

• All Would Prefer to Continue Service with ML&P

• All Want to See Relief on Connection Requirement to Reduce Demand

• Some Would Like to Use Smart Grid Behind Primary Metered Grid