1. Creating A Greener Energy Future For the Commonwealth Clean Heat & Power in Massachusetts John Ballam, P.E. Manager of Engineering & the CHP Program MA Department of Energy Resources

2. Creating A Greener Energy Future For the Commonwealth Existing Clean Heat & Power Programs & Initiatives CHP CAPex Measure in Utility Administered State EE Program  Portfolio Standards (Performance Based Incentive) Renewable Portfolio Standard (RPS)  Electricity only from renewable sources PV, wind, hydro, LFG, MSW, ADG, Bio-mass  Alternative Energy Portfolio Standard CHP with eligible fuels (includes natural gas) Thermal output only with renewable fuels (new)  Grants : Resiliency, Storage, Green Coms. 2

3. Creating A Greener Energy Future For the Commonwealth Principal Program Goals  Cost Reduction  Reduce Cost of Grid Electricity for Ratepayers  Reduce Cost (amount) of fuel to generate  Reduce T&D Costs by Reducing Demand  Promote Growth of Renewable Energy  Reduce Carbon Emissions  Stimulate Renewable Industry Sector There is a strong interconnection between the two objectives based reducing consumption of emitting fuels. 3

4. Creating A Greener Energy Future For the Commonwealth GENERIC CHP SYSTEM Metered Energy : Net electricity Heat to Load Heat from Load Fuel 4 Net Electricity

5. Creating A Greener Energy Future For the Commonwealth CHP IS AN EFFECTIVE EE & GHG MITIGATION MEASURE Example: Performance of a “vanilla” 1 MW CHP unit compared with energy supplied by the grid and boiler (the BAU) Electrical Efficiency: 30% Heat Recovery: 57% of the by-product heat Overall Efficiency: 70% Capacity Factor : 66% PERFORMANCE: Annual Source Fuel Savings.vs. BAU: 15,021 MMBTU ( 19%) Net Source GHG Reduction.vs. BAU: 708 Tons (16%) 5

6. Creating A Greener Energy Future For the Commonwealth Utility EE Plan CHP Incentive Three Level Tiered Incentive for Qualifying Systems: Based on level of efficiency of existing facility and commitment of owner to implement further measures recommended from audit. Hard cap of 50% total cost on all awards. ≤ 150kW : T1 = $750/kW; T2 = $1000/kW; T3 = $1200/kW >150 kW: T1 < $750/kW; T2 < $950/kW; T3 < $1100/kW Schedule of Payments: 80% on completion; 20% verification of performance. 6

7. Creating A Greener Energy Future For the Commonwealth APS CHP - Basics Established by GCA law Complimentary and Supplemental to the C&I CHP measure Credits typically worth about 2 and 3.5¢ per net kWh electric. Qualified generators earn credits (AECs) for performance based on values for the  Fuel input  Net MWH output  MMBTU heat to a useful load There is no end date set for this incentive Which are terms in the APS formula for CHP AECs. The DOER is the qualifying authority. 46

8. Creating A Greener Energy Future For the Commonwealth APS AECS Incentive 1 AEC = 1 MWH of Net Source Fuel Savings The AECs Formula: # AECs = MWH elec /0.33 + MWH therm /0.80 - MWH CHP fuel AECs are tradable certificates that LSEs purchase in order to meet their obligation under the APS law. APS GROSS INCENTIVE@$20/AEC For the 1 MW “vanilla” system in previous slide = $158,000.00/yr 47 BAU Source Fuel

9. Creating A Greener Energy Future For the Commonwealth Current Capacity (MW) of Operating & Under Construction APS CHP by End Use 2015 9 Total Capacity = 360 MW

10. Creating A Greener Energy Future For the Commonwealth Current Number of APS CHP Systems Operating & Under Construction Systems by End Use 10

11. Creating A Greener Energy Future For the Commonwealth Breakdown by Sector of APS Industrial CHP Systems 11

12. Creating A Greener Energy Future For the Commonwealth APS Renewable Thermal New Addition to the APS Three output size based sub-categories: Small, Intermediate, Large Small - Qualified units receive 10yrs worth of credits right away Intermediate and large are directly metered – qualification process and credits very similar to CHP Technologies Solar Thermal, Air & Ground Source Heat Pumps, Bio-mass, Bio-gas, & Bio-fuel Fired units. 12

13. Creating A Greener Energy Future For the Commonwealth APS Renewable Thermal 1 AEC per MWH net thermal energy transferred to useful load Schedule: Regs & Guidelines for Small, Intermediate, Large Systems now posted for public comment at: http://www.mass.gov/eea/energy-utilities-clean- tech/renewable-energy/renewable-thermal/ 13

14. Creating A Greener Energy Future For the Commonwealth State of Clean Heat & Power Today 2015 a very active year: The as projected kWh savings from CHP project approved by the EE plant accounted for 17% the projected savings for the entire portfolio for 2015. In general good with promise sustainable growth: Some Favorable Factors: Great Support from Exec, Legislature General Public and NGOs. Growing market pull by owners/operators of Intensive and/or Critical facilities. High cost of grid supplied electricity Increasing recognition of the risk avoid dance that energy resiliency of CHP can deliver. 14

15. Creating A Greener Energy Future For the Commonwealth State of Clean Heat & Power Today Growth in the number and experience of the various members that make up the community that provides information, systems and other services to the various CHP market sectors. The potential growth in renewable thermal applications. Some Challenges Increasing complexity, costs and delays for interconnecting with the grid. Opposition to any generation with fossil fules 15

16. Creating A Greener Energy Future For the Commonwealth State of Clean Heat & Power Today CHALLENGES: Managing and making best use of growing amount of data 16

17. Creating A Greener Energy Future For the Commonwealth Resources at the MA DOER APS Website: www.mass.gov/energy/aps www.mass.gov/energy/aps Statement of Qualification Application Standards for APS meters Tools for estimating AECs generated for your project Information about the Community Clean Energy Resiliency Initiative opportunity DOER CONTACT INFO 17 John Ballam CHP Program Manager 617-626-1070 john.ballam@state.ma.us Michael Judge Director, Renewables Division Michael.judge@state.ma.us Howard Bernstein APS/RPS Program Manager 617-626-7355 howard.bernstein@state.ma.us CHP Growth in Mass.