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Cogeneration Sparks Apartment Sector Interest

View the original article on Canadian Apartment Magazine online – Cogeneration Sparks Apartment Sector Interest

New micro CHP systems make off-grid power a viable option for residential building owners
Tuesday, February 23, 2016
By Erin Ruddy

Cogeneration in Canada is no longer just for hospitals and industrial facilities—multi-residential property owners are beginning to take note of this energy savings technology too. Defined as “the simultaneous production of electrical and thermal energy from a single fuel source,” cogeneration is a reliable way to produce power while redirecting ‘waste heat’ back into the building as useful energy.

Though Europe has been a widespread user of CHP (Combined Heat and Power) for decades, grid limitations and rising energy costs here in Canada are prompting residential building owners to expand their options and look at alternative energy savings solutions. According to Mike Mulqueen, Lead – CDM Business Development, Multi-Residential Sector at Toronto Hydro, CHP is emerging as a viable option.

“We’ve been seeing a lot more interest in CHP lately,” he says, noting a recent meeting with a consultant who has completed over 300 assessments for interested multi-residential customers across southern Ontario. “Advancements in technology have made cogeneration more accessible for most properties. There are now small-scale solutions that can follow the thermal loads, meaning even buildings with as few as 50 suites could be suitable for a CHP system.”

Right now in Canada, seven per cent of electricity is produced using cogeneration. Alberta has the largest capacity, with the majority going to serve the oil and gas industry. Ontario is the second largest producer, serving a broader range of industries—from manufacturing, forest and hospitals to universities and entertainment complexes.

But implementation continues to expand. Aside from increased efficiency, reduced greenhouse gas emissions (compared to traditional separate heat and power production), and significant cost savings for users, CHP also promises improved security of supply as it reduces the risk of consumers being left without electricity during power outages.

“Under normal operating conditions, a CHP plant generates electricity behind the meter, matching the thermal load of a facility drawing some power from the grid,” explains Mulqueen. “But during emergency situations when grid power is not available, a CHP system can operate as an electrical island to power essential requirements, like elevators, lighting, heating, ventilation, and hot and cold water distribution equipment.”

Paul Ruth, president of DBS, a certified HVAC mechanical contractor and cogeneration supplier, is a huge advocate of CHP and believes the benefits greatly outnumber the risks. “It is a proven, reliable technology,” he says. “It can be installed on your rooftop, in your garage or somewhere else on the property. Once the equipment is up and running, your building’s Net Present Value increases as your energy reduces. Systems have a long lifespan of 20 to 25 years, and thanks to predictive maintenance, the equipment is straightforward to operate.”

Gaining acceptance in Ontario

Ruth, whose team has been immersed in the CHP movement for the past three years, says the road to acceptance hasn’t been without its challenges. From determining equipment specifications and adapting standards for Canadian consumption, to educating policy-makers and getting utilities on side, the results of the group’s collective efforts are finally coming to fruition.

“Our customers are about to realize some very substantial gains,” he says. “It’s still early days and the data is limited, but we know that systems can offer up to 90 per cent energy efficiency. And now with incentives available to offset the cost of installment, it’s a solution many residential building owners will be seriously looking at.”

One notable entity embracing CHP technology is Skyline Group of Companies, based in Guelph, Ontario. Since 2015, Skyline has been working closely with DBS to install micro CHP systems in a handful of its residential buildings—but the commitment won’t end there. With approximately 200 sites currently undergoing assessment, Skyline is primed to be an industry leader using cogeneration technology to reduce both its energy usage, and its carbon footprint.

“Skyline has assembled a team of about 12 specialists to determine the most effective way to incorporate CHP technology at our properties,” says Roy Jason Ashdown, Co-Founder & Chief Sustainability Officer, Skyline Group of Companies. “To date we have completed dozens of studies and the list of suitable sites continues to grow. We have installed several systems in St. Catharines and the real time data is being measured and verified by our engineers. The initial numbers look very promising.”

According to Ashdown, the driving force behind his company’s recent shift to cogeneration was the mounting cost of energy. “Reducing consumption at a property is the most effective way to hedge against rising energy costs,” he says. “But CHP offers a new solution that complements other energy conservation initiatives. It allows property owners to generate cost-effective, on-site power, and the by-product is hot water that is reclaimed and used for a multitude of heating purposes. The potential islanding if the grid goes down is also a bonus.”

The long and winding process

Key benefits aside, the process of installing a cogeneration system requires many steps and the involvement of numerous outside parties. At the onset, interested consumers are required to do a pre-feasibility study through their local utility to confirm there is sufficient capacity on the distribution system to accommodate the new generation source.  If the pre-feasibility study is positive, the next step is an engineering study. In total, the process can take up to six months to complete.

“This has not been an easy process to work through,” notes Ashdown, “but we stuck with it and have built a strong team to help us administer and implement this technology. Like any new systems there are trials and tribulations along the way, and lots of education for everyone involved. You have to walk before you can run. The process can be a long one so the key is to get the right people involved.”

Before CHP was a consideration, Skyline sought out and implemented other sustainability strategies, including the installation of over 60 roof top solar systems throughout its portfolio. But the founding partners have become so intrigued by CHP, they have created a new company called Anvil Crawler to work alongside DBS to help the multi-residential industry better navigate the installation process.

“The plan is to specialize and stick-handle all of the elements of CHP so that it becomes more than just an idea, but a reality for those in the multi-residential industry,” says Ashdown. “Being active landlords for over 25 years, we believe we have a keen understanding of what landlords want and what landlords need, and how to effectively deliver it to them.”

Funding and incentives

Currently, incentives are available for funding of up to 100 per cent of the engineering studies to enable a CHP project. Building owners may also qualify for up to 40 per cent of the total project cost to implement a system. To be eligible, the CHP plant must produce a minimum of 100,000 kWh for on-site consumption annually while maintaining a minimum overall system efficiency of 65 per cent (meaning 65 per cent of the energy from the natural gas powering the CHP system is used as electricity or for heating).

“Up until recently, the thinking was that a typical multi-residential project would be between 250 – 500 kW,” notes Mulqueen. “However, based on more recent discussions and new technologies coming into the market, we now believe the average project size is actually going to be less than 100 kWs because of smaller scale and modular solutions being offered that can ramp up and down to follow the thermal load throughout the year.”

With provincial and federal governments now backing cogeneration and setting aggressive targets for reducing energy consumption and drawing from more decentralized sources, we look forward to following this smart technology and reporting back throughout the year.