Co-generation Operating Costs

The generator in the basement provides for a good deal of local flexibility, at least in principle, with respect to our energy choices. In the present setup, the generator runs when heat is needed, either space heat or water or both. The plan or goal is to optimize this with our geothermal units, but that is a big project, and it will take a while. For the rest of this year's heating season, we will be running only the generator when we need heat--unless we get some anomalous cold wave, but given the lateness of the season, that is rather unlikely.

The question I've been thinking about is how to best reduce operating costs, and this is a first look at those issues. First up is the question of what are the co-generation operating costs? One would think this would be an easy question. For now, I will try to make it easy, but it could be complicated.

The State Legislature in Connecticut has been fairly progressive with respect to energy issues. In the recent past, they have opened up the electric grid to competitive pricing where companies can compete for customers, so some competition has come in. The Legislature has also required net metering, so any kilowatt hours sent back from solar or generators etc., will net against those that are pulled from the grid. One of the recent mandates coming from Hartford is that residential customers must have a variable pricing option. This is to encourage consumers to reduce demand during the peak hours. We haven't explored this option too far. An initial inquiry with our supplier, Connecticut Light & Power, was discouraging, for they didn't believe people with generation capabilities were allowed to use variable pricing. I've just looked at the CL&P website, and it appears that we are. This is definitely something to look into.

For now, let's use the KISS principle and keep it simple. Our current rate is the standard single rate residential rate that is a constant charge per kilowatt hour (KWH) used (plus a monthly fee that seems to ever be creeping up in price and is currently $16/month). This power rate has also been going up and is currently $.18/KWH. The propane costs are currently around $2/gallon. This has come way down from last summer, but it is still historically high.

So what does it cost? Per gallon of propane, the Ecopower makes 5.82 KWH/gallon. That number is derived from the data on the Ecopower spec sheet, and I'm suspicious of the accuracy of that last decimal place, but okay. At $2/gal, the price then is $.34/KWH, or almost twice the amount we are paying. Hmm....what's wrong? That's easy! We are also using the heat. If we were using the generator to make electricity only, the cost would be too high. So let's look at it from a heating perspective.

We (currently) use the Ecopower only when heat is needed, and because we are also generating electricity, we have to use more fuel than we would if we were only heating. The question is how much more? A typical new boiler is about 85% efficient. Some of the older ones are a lot worse, but let's compare to new equipment. The Ecopower, from a heating perspective, is 65% efficient (and 27% efficient for power generation). Let's assume then we use one gallon in a standard boiler. In the Ecopower, we need to use 1.3 gallons for the same heating needs. The advantage is that we'd also generate 7.56 KWH of electricity along with that heat. Let's compare costs.

In a standard residential setting here in CT, the heating and power costs would be $2 for the propane plus (7.56 KWH * $.18/KWH = ) $1.36 for the power costs or $3.36. With the Ecopower, we are charged the cost of 1.3 gallons of propane which in this example would be $2.60, and the power generated comes as a free by-product. Per the heating requirements for a traditional boiler using a gallon of propane, we are saving $0.76 or 23% in combined heat and power operation costs.

For this comparison to work, there are a few assumptions, namely that one also uses power, that the power can be sold back at the same rate it is generated (net-metering laws), that the amount of power used is more than what is produced with the co-generation. There are also issues with the relative pricing of power versus heating. For instance, in New England, our power prices are driven mainly by natural gas prices, so co-generation works well here. In the Midwest, power is driven mainly by coal prices, so one would have to compare local power prices with heating fuel prices.

These assumptions are important and drive the applicability of co-generation. For instance, it only makes sense to keep part of the local needs as co-generation. You don't want more power generation capacity than you use, and one must have good heating requirements to even consider the idea (so it may not be a good fit in the Southern USA unless it can be sized primarily for hot water needs, and even that may not make sense, because solar heating would be much better in the South).

For our needs here in CT, the 5 KW Ecopower is a good sizing fit, but we could have settled for something a little smaller if one had been available. For smaller houses with smaller demands, a smaller unit (1-2 KW in size) would be preferable. For larger demands, say small businesses, etc., a larger unit would be better.

In this simple comparison, it is clear the co-generation has lower operation costs. There is the question of whether or not it is worth the machine cost, and I defer that question to another post. It is also important to know that there are other advantages coming from the co-generation. Less energy is lost in the generation and transmission of the power with the typical energy losses as high as 70% in standard power generation. The vast majority of those losses are saved with co-generation. Further, the co-generation requires less transmission grid capacity which will be a big deal going forward. Getting more power lines up in the current environment will neither be easy nor cheap. Needless to say, I'm a big fan of co-generation. It has just come 20 years too late.

First Look at Ecopower Operation

It has almost been a year now since the generator was installed in the basement, and there are more data points to analyze than there is time to do it. The photo shows the engine from the side view. First let's review the motivation for buying this thing and then see how it has performed.

The decision to purchase the co-gen unit goes back to late 2006 shortly after the geothermal was installed. Geothermal is a great heating device, but the power usage is high. In New England, geothermal peak power is in the winter, and if everyone went to geothermal for cooling, the power peak would be in the winter instead of in the summer as it is now. That is pretty much true across the USA, although it gets hard to use geothermal for cooling in the deep south due to the high ground temperature. I'm digressing.

The concern was the large power requirements and dependence upon the grid for heating needs. Given a choice, I'd choose the domestic power grid over heating oil supplied by foreign providers who don't seem to care for us, which is why we went to geothermal in the first place. The geothermal unit sizing still required second-stage heating, and moving from heating oil to propane (natural gas is not available at our house still) was a better choice, and with a co generation unit, I'd get both heat and power and a fuel source that is about 70% domestic instead of about 70% foreign.

So, why not more solar. Definitely, more solar would be better, but the largest problem with solar, aside from the cost which is becoming less and less of an issue, is its intermittent nature. Solar power has a fixed generation schedule with frequent interruptions. These interruptions are difficult to forecast as the behavior of clouds is rather hard to predict. The other difficult problem is that these solar outages can extend for a couple of days, so there is some need for something other than solar (or lots of power and heat storage) to help smooth out the rather jagged production.

The other reason is the gross inefficiency of the electric grid. With close to 70% of the energy lost as waste heat, there is good reason to be generating power close to where heat is required, and residential heat is a large fossil fuel consumer, so generating power at the residential level has the potential of recapturing the heat lost in power production. In terms of cost, it is a trade-off between building a small number of large-scale power plants that are 30-50% efficient versus a larger number of small-scale generators that are 95%+ efficient. Historically, the large-scale system has dominated for a variety of reasons, not all of them rational, but with the semiconductor revolution of the 1980s, it is my opinion that the micro-generation paradigm is more efficient, potentially cost-advantageous, and definitely better in terms of energy security.

The following figure shows the amount of generated daily power from June, 2008 through March, 2009. The big gap in October is due to a computer outage, so daily Ecopower files that are normally available were not saved.





Notice in the figure there are three main periods. When the system was started, it was put in a maximum power generation mode. The amount of power generated was limited by how fast the heat could be dissipated. No system was installed to dissipate excess heat other than losses from the water tank, because it was not really cost-effective to do so (I may be changing my mind on that). Starting in late July, in an effort to reduce operating costs, we switched it to water heating and second-stage space heating mode only, so the Ecopower only ran when hot water (or second-stage house heat) was needed, and the average daily power was reduced as a result. It ran in this mode until the end of 2008.

At the beginning of 2009, the unit was switched to first-stage heat. The problem with this mode is that the generator is not sized to the heating needs of the house. It comes at a maximum 5KW power generation capability, and to meet the standard design criteria for house heating needs, it would have to be 2-3 times larger than it is. When thinking about the size of generator I wanted, 5KW seemed to be about the right size to match up the with geothermal needs and about what I'd want for backup power in case it was necessary. An important point is that with a co-generation unit, one still wants a second stage heating source for the very cold days. Otherwise, the unit required will be way too large for the local power needs.

Two points after 2009 are worth mentioning. The drop shortly after the New Year was a result of a discovered propane leak, so we shut off the Ecopower until it was fixed. The second one at the end of February was over a vacation and the house heating needs were dramatically reduced. The rest of the variability is mainly explained by changing temperatures and the required heating needs.

Currently, I think 5KW is too much given our plans and our current other equipment, but for now, it is still too little to heat the house by itself. We found this out shortly after switching to the cogen unit running by itself with no geothermal heating, for it was not enough to keep up with the heating load, and the house slowly became colder. For the colder days, I've come up with a compromise which is to put part of the house onto geothermal and part on co generation. This happens when the average daily outside temperature is near freezing or colder as seen in the next graph.



In this graph, we plot the average daily power generation versus outside temperature (which is recorded every 15 minutes by a thermometer outside the house and read by the Ecopower computer). Each dot represents one day. Remember that zero degrees Celsius is 32 degrees Fahrenheit. Only the days from August, 2008 are included. The important features are (1) the lower boundary where the Ecopower is used for hot water and 2nd stage heating needs, (2) the upper boundary where the limit is the 4.7KW power capability, and (3) the sloping boundary on the upper right where the Ecopower is used as first-stage heating. Above 15C (60 degrees Fahrenheit), there is no space heating need and the Ecopower is used only to make hot water. For the points in between the 3 boundaries, the heating was a combination of Ecopower and geothermal.

There have been a few issues with operation, but that will have to be discussed in another post. Bottom line is that most of the issues have been resolved, and the Ecopower is now running well and represents yet another step down for us in terms of fossil fuel usage and another step in the direction of energy security.

The next question is how best to operate the generator by itself and/or with the geothermal. This is not an easy question to answer, and it is one of the problems I'm working on now.