Building owners install combined heat and power (CHP) units, also called cogeneration units, to generate electricity for their facilities. They produce heat as a byproduct, which is used to heat the facilities' water and air. CHP is most economical for properties that need a large volume of hot water throughout the year. At least five Greater Boston hotels have installed it--Comfort Inn & Suites Logan Airport, Royal Sonesta, Cambridge Residence Inn, DoubleTree Suites Boston and Hotel Indigo.
Until recently, many Boston hotels and several Cambridge hotels were required to install an expensive grid connection along with CHP units, because of their location on the downtown electricity grid. This connection device made CHP too expensive for hotels to consider.
Recently, the requirement to install these devices has been relaxed. Hotels and other commercial buildings will be allowed to install moderate-sized CHP projects without them. The key is that the units cannot be sized to produce more electricity than the facility uses--thereby avoiding safety problems for electricians working on the grid. All projects must be approved by NSTAR, which will assess them for safety, and determine whether they qualify for incentives.
CHP projects are among the best strategies for reducing hotel energy use and improving Energy Star Portfolio Manager scores.
There is another important advantage to CHP units--they enable facilities to avoid shutdown during blackouts. According to The U.S. Department of Energy's energy.gov website, "During and after Hurricane Sandy, CHP systems played a key role in enabling hospitals, universities, schools and residential buildings to continue operations when the electricity grid went down in the hardest-hit localities -- proving that CHP is a sound choice in making our energy infrastructure more resilient in the face of extreme weather events."
Hotels have two choices for acquiring CHP units. The first is to buy them and maintain them. The project ROI's are variable. I have seen them range from 2.3 to 4+ years, including the Mass Save incentives.
The second option is to obtain the units using a Power Purchasing Agreement (PPA). In this arrangement, the vendor installs, owns, and maintains the equipment. The hotels pay the vendor for the electricity and heat at pre-determined, guaranteed discount rates.
If hotels have the capital and the will to maintain the CHP units, they will do better by purchasing them. If not, then PPA's make more sense.
The DoubleTree Suites Boston in Allston installed CHP in 2010 using a PPA. The vendor, American DG Energy, owns and maintains the units, and sells the electricity, heat and hot water to the hotel. In this video, the hotel's GM Joe Dadiego and Chief Engineer Erik Jacobson describe the benefits to the property: they did not have to pay for the unit, they save 5% to 10% on the energy that it generates, the vendor managed the installation well, the unit is monitored continuously off-site, problems are detected immediately, down-time is minimal and American DG Energy maintains the machine.
I encourage you to consider CHP as a way to reduce energy bills, develop a more reliable source for back-up power and boost your hotel's Energy Star Portfolio Manager scores.
We will have a presentation about CHP at our January 16 BGT meeting.