Considerations for Implementing Combined Heat and Power in Highrise Residential Buildings: Lessons Learned February 4th 2010 1

Accelerating the adoption of green building technologies and contributing to the transformation of the built environment. Objectives: Evaluate new green building technologies & equipment through in-situ testing and monitoring in new and existing high rise buildings; Leverage knowledge and experience of leading developer and building owner(s) to strengthen the cleantech product development and commercialization value chain.

What is Combined Heat & Power CHP, or Cogeneration, utilitizes the waste heat from electricity generation to produce simultaneous hot water (thermal energy) Sewage Treatment Primary types of equipment: Microturbines Reciprocating Engines Fuel Choices: Natural Gas (common) Biofuels (eventually) Source: www.powerecosystems.com

Equipment Choices Sewage Treatment Advantages Disadvantages Reciprocating Engines High power efficiency Lower $/kw Wide range of sizes Part load operation Fast start-up time Multi-fuel capability Maintenance well understood Can operate with low pressure gas Must be cooled Low power:weight ratio Out-of-balance forces require substantial foundations and anti-vibration isolation High levels of low frequency noise High maintenance costs Micro Turbines High reliability due to small number of moving parts Simplified installation Low maintenance required Compact size & Light weight Acceptable noise levels Some fuel flexibility Low emissions High temperature heat exhaust for heat recovery Acceptable power quality Higher Cost/kwh More specialized expert/qualified service personnel Extended downtime potential Sewage Treatment

Potential Benefits: CHP + DG Energy Efficiency and Potential Emissions Reductions Reduction in building electricity demand Uninterrupted emergency power generation Distributed generation: Enables self reliance & fuel switching flexibility Reduces efficiency losses from distribution networks Reduces investment requirements in upstream capacity (smaller centralized power plants) Sewage Treatment There is a wrong way to design a CHP system in the residential building context

Tridel’s Combined Heat & Power Feasibility Studies Sewage Treatment Single Condominium Building Tridel, TAF, TRCA, OPA, Enbridge, Provident Energy Management 2. Tandem Towers in New Development Complex Tridel, Enbridge, Private 3rd Party Utility Grand Triomphe II 540 KW CHP Solaris I & II @ Metrogate 1.2 MW CHP

Typical Time of Use for power in MURBs Design Considerations Size system to deliver less than base Power load To optimize system performance, thermal storage is necessary on larger systems Then THen But you will still have too much heat in summer To optimize system performance, thermal storage is necessary on larger systems Then THen Typical Time of Use for power in MURBs

Key Factors in Designing a System Scale Do not exceed the building’s base load. Stay behind the meter. Too complicated to grid connect. Do not exceed the summer thermal (DHW) load. You’ll be dumping hot water and eroding the environmental benefits. Size for emergency back-up generator (Check economics on smaller systems) Operating Schedule Plan to run the equipment during Peak Periods mainly - and maybe Mid-Peak. Do not operate during off-peak, or you’ll erode environmental benefits. System will mostly likely not be thermal load following for economic reasons. Thermal Storage Probably required on residential installations Adds cost but preserves environmental benefit and system efficiency Sewage Treatment

Key Factors in Designing a System 4. Location Installing near the ground may require special exhaust venting Installing on the roof may require additional sound and vibration attenuation 5. Cost Approximately $1000/kw for equipment $2500/kw installed 6. Maintenance Use a reliable operator. These systems can be too complex for a condo board. 7. Design-Build/Own-Operate A third party can design-build-own-operate, but be mindful of above considerations Sewage Treatment

Illustrative Economics of a 540 KW CHP in a New Building Assuming Time of Use Rates apply Operating Schedule: 8 hrs/day @ Peak + 6 hrs/day @ Mid (7 months) = 3,036 hrs/year Avoided Costs from Operation: $277,000/yr Operating Costs (at $0.38/m3): $186,000/yr Operating Margin (before interest): $91,000 Install Costs: $1,361,000 - $250,000 (Generator) - $86,400 (Incentive*) - $X (boiler reduction) = $1,024,600 Sensitivity $/kwh + 20% improves Operating Margin to $131,500 + $/m3 + 20% drops Operating Margin to $80,500 Sewage Treatment $350/KW BBPNC = $189,000 Drops Capex to $835,600 or $461,000 after loan Interest: $66,000/yr Margin after interest: 25000

Enabling Conditions Constraints CSA-282 rule change for emergency back-up systems Retiring old appliances Low input fuel prices Time of Use Rates Coincident Power/Thermal demand Provincial price support mechanism FIT for Biogas ($ $.16/kwh) Sewage Treatment Equipment start-up times must meet other code requirements Install costs higher for retrofit NG price volatility risk Existing regulated price plan Non-alignment in summer No viable Clean Energy Standard Offer for NG Availability & Price

THANK YOU Jamie James jjames@350capital.com 12