POWER February 2017 - 26

COMBINED HEAT AND POWER
CHP 2.0: New Fuels and New
Business Models
Courtesy: DONG Energy
A variety of approaches have been used to capture new benefits from combined
heat and power (CHP) facilities. Some owners have transitioned to new fuels or
added renewables to the mix, while others have implemented unique business
models to spur development. As district heating systems are brought into the 21st
century, the CHP sector seems destined for more change.
Aaron Larson and Thomas W. Overton, JD
O
ne of the oldest and least dynamic
sources of distributed generation is finally
starting to evolve. For more than
a century, combined heat and power (CHP)
has been a staple of universities, hospitals,
and other industrial sites with large energy
needs, as well as municipal district heating
(DH) systems, but the approaches to generating
power and how these systems are developed
and paid for have changed relatively
little in decades. But now, the economic,
environmental, and regulatory pressures
that are remaking the power sector at large
are also beginning to foster some significant
changes with CHP. As large utility-owned
power plants are transitioning toward cleaner
generation, greater efficiency, and innovative
business models, the CHP world is following
suit.
26
A History of Coal Usage
On college campuses, administrators have
long recognized the value of CHP plants.
Institutions are a natural fit for the solution
because their facilities not only have a large
demand for electricity but also have massive
heating and cooling needs.
CHP offers universities a win-win solution
because electricity can be produced from
high-pressure steam, while thermal energy can
be extracted at appropriate pressures for heating
or cooling needs. Efficiency is improved
from what is often less than 40% when the
services are supplied separately to more than
75%, in some cases, using CHP technology.
That not only saves money on energy costs,
but it also reduces environmental emissions.
And the environmental considerations are frequently
a driving factor for change.
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That was the case at Michigan State University
(MSU). MSU-founded in 1855-sits
on a 5,200-acre site in East Lansing, Mich.
The campus includes 532 buildings with
about 21.7 million square feet of floor space.
Near the center of it all rests the Simon CHP
plant-the fifth in a long history of MSU
power plants. The Simon plant has four dual
fuel-capable boilers with a total steam capacity
of 1.2 million pounds per hour at 900
psig. Each unit was designed to operate at full
power on either coal or natural gas.
The first two units were built in 1965,
and a third boiler was added in 1973. That
unit was required to burn low-sulfur coal to
comply with the Environmental Protection
Agency's (EPA's) Prevention of Significant
Deterioration (PSD) rule. In 1993, a circulating
fluidized bed boiler was constructed at
POWER | February 2017
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POWER February 2017

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