QUOTE
New look at energy option
By TUX TURKEL, Portland Press Herald Writer
Friday, October 14, 2005
Soaring oil and natural gas prices have Maine businesses scrambling to find cheaper alternatives for heat and light. One solution: They can generate their own power.
That's what Paul Aubrey is suggesting.
Aubrey is president of Self-Gen Inc. of Scarborough, a spinoff of Technical Support Inc., an engineering firm he started 13 years ago. Technical Support focuses on industrial power design and energy management, mostly in the paper industry.
Now Aubrey and his seven-person staff sense a renewed opportunity in designing on-site power systems. Sometimes called "distributed generation" or "cogeneration," the systems let companies that need a lot of heat energy make their own thermal power, through the process of generating electricity. The electricity can be used by the company or sent into the utility grid.
Another form of distributed generation uses renewable energy, such as wind power or biomass. Self-Gen won a Maine Technology Institute seed grant to test a prototype of a wind turbine that could be installed someday at homes and small businesses. Aubrey has the machine installed behind his Scarborough home.
Over the past few weeks, Self-Gen has entered into agreements to conduct feasibility studies for on-site power projects at a hospital in Greater Portland and a college in New Hampshire. A Maine sawmill also is exploring the option. Aubrey declined to name the businesses until the deals are finalized, but he's encouraged by the interest.
"Our team believes the time is right because of energy conditions," Aubrey said. "Maine businesses are in pain."
There are signs Aubrey's timing may be good.
Distributed power is getting a fresh look worldwide. In Germany, where a new law encouraging growth of the technology recently took effect, distributed power is projected to supply up to 40 percent of the country's power by 2020, up from 16 percent today.
Distributed generation also got a boost recently at the U.S. Conference of Mayors meeting in Chicago. Members passed a resolution endorsing the growth of off-the-grid systems. The systems' reliability could help lure new businesses to cities, they said, and they'd be less vulnerable to power disruptions from natural disasters or terrorism.
In Cambridge, Mass., an office opening this winter at biotechnology firm Biogen Idec Inc. will feature a gas-fired power plant in the basement to heat and cool six buildings. The plant takes advantage of new state rules negotiated with the local utility.
In Bangor, work has begun on a 4.6-megawatt cogeneration system at Eastern Maine Medical Center. The plant is being built by Cianbro Corp. of Pittsfield.
Cianbro also recently finished a $9.3 million on-site power plant for the National Institutes of Health in Bethesda, Md. The 23-megawatt project includes a natural gas-fired turbine and heat recovery steam generator.
Cianbro is very concerned about the cost of energy for Maine businesses and is looking for projects that can save money, spokeswoman Dottie Hutchins said. "Building these small cogeneration plants on-site is part of that strategy," she said.
In a typical on-site power plant, an engine or turbine generates electricity. The system is fueled by natural gas, propane or diesel. Waste heat created by the process, contained in exhaust gases, is recovered and converted into steam or hot water. That steam also can be sent through an absorption chiller and used for refrigeration.
At first glance, this arrangement doesn't sound like it makes economic sense in an era of high petroleum prices. But the newest, small-scale systems run at overall efficiencies in the 80 percent range, Aubrey said, compared to 35 percent or so for a typical utility generator. At today's wholesale prices, using natural gas solely to generate electricity wouldn't produce any real savings, he said. But recovering the thermal energy essentially provides heat for free.
"The thermal savings is the key, especially when you're replacing fuel oil," Aubrey said.
For instance: Half the total energy use in a typical hospital is linked to some form of heat, such as warming water and sanitation. At the hospital Self-Gen is working with, engineers are considering a 3-megawatt gas-fired plant, which will produce enough energy to light 40 large homes and provide heat for 15 of them.
The system could cost roughly $700,000, but would save $175,000 a year on heat, based on today's natural gas prices. The unit would replace roughly one-third of the hospital's heating demand and serve as an emergency back-up system for the utility grid.
Sawmills, food processing plants and electronics assembly plants that have big heating loads also can benefit from on-site power. Ice skating arenas and companies that use a lot of refrigeration are candidates, too.
On-site cogeneration power has been around for decades at paper mills and other large industrial plants that need heat and have waste fuel to burn. They're less common at smaller enterprises, although there was a flurry of interest in Maine in 1999.
With utility deregulation then looming, many companies were considering the economics of on-site power. Aubrey had hoped to take advantage of this interest, launching Self-Gen in 2001.
The startup was initially successful, with several distributed generation projects in southern New England. And it conducted dozens of feasibility studies and pre-engineering designs for businesses in Maine and elsewhere.
But most of these companies, Aubrey said, used the data to negotiate competitive power supply contracts from utilities and wholesale generators. Self-Gen's aspirations went nowhere. Most of Aubrey's business reverted to the engineering work being done by Technical Support Inc., which today has gross revenue of between $800,000 and $1 million.
It's a different story now, as existing contracts expire. The high price of natural gas, burned at central generation plants, is pushing up electric rates. Aubrey is in talks with a sawmill that was paying 5.2 cents per kilowatt hour for power supply. The new rate will be 11 cents.
Rate shock is setting the stage for what Aubrey hopes will be serious commitments to build on-site power plants in Maine. Many companies here already have cut energy use through conservation, he said. The next step is to find cheaper ways to generate power and stay competitive.
"If some of these companies can't get something done about their high energy costs," he warned, "they're going to leave the state."
By TUX TURKEL, Portland Press Herald Writer
Friday, October 14, 2005
Soaring oil and natural gas prices have Maine businesses scrambling to find cheaper alternatives for heat and light. One solution: They can generate their own power.
That's what Paul Aubrey is suggesting.
Aubrey is president of Self-Gen Inc. of Scarborough, a spinoff of Technical Support Inc., an engineering firm he started 13 years ago. Technical Support focuses on industrial power design and energy management, mostly in the paper industry.
Now Aubrey and his seven-person staff sense a renewed opportunity in designing on-site power systems. Sometimes called "distributed generation" or "cogeneration," the systems let companies that need a lot of heat energy make their own thermal power, through the process of generating electricity. The electricity can be used by the company or sent into the utility grid.
Another form of distributed generation uses renewable energy, such as wind power or biomass. Self-Gen won a Maine Technology Institute seed grant to test a prototype of a wind turbine that could be installed someday at homes and small businesses. Aubrey has the machine installed behind his Scarborough home.
Over the past few weeks, Self-Gen has entered into agreements to conduct feasibility studies for on-site power projects at a hospital in Greater Portland and a college in New Hampshire. A Maine sawmill also is exploring the option. Aubrey declined to name the businesses until the deals are finalized, but he's encouraged by the interest.
"Our team believes the time is right because of energy conditions," Aubrey said. "Maine businesses are in pain."
There are signs Aubrey's timing may be good.
Distributed power is getting a fresh look worldwide. In Germany, where a new law encouraging growth of the technology recently took effect, distributed power is projected to supply up to 40 percent of the country's power by 2020, up from 16 percent today.
Distributed generation also got a boost recently at the U.S. Conference of Mayors meeting in Chicago. Members passed a resolution endorsing the growth of off-the-grid systems. The systems' reliability could help lure new businesses to cities, they said, and they'd be less vulnerable to power disruptions from natural disasters or terrorism.
In Cambridge, Mass., an office opening this winter at biotechnology firm Biogen Idec Inc. will feature a gas-fired power plant in the basement to heat and cool six buildings. The plant takes advantage of new state rules negotiated with the local utility.
In Bangor, work has begun on a 4.6-megawatt cogeneration system at Eastern Maine Medical Center. The plant is being built by Cianbro Corp. of Pittsfield.
Cianbro also recently finished a $9.3 million on-site power plant for the National Institutes of Health in Bethesda, Md. The 23-megawatt project includes a natural gas-fired turbine and heat recovery steam generator.
Cianbro is very concerned about the cost of energy for Maine businesses and is looking for projects that can save money, spokeswoman Dottie Hutchins said. "Building these small cogeneration plants on-site is part of that strategy," she said.
In a typical on-site power plant, an engine or turbine generates electricity. The system is fueled by natural gas, propane or diesel. Waste heat created by the process, contained in exhaust gases, is recovered and converted into steam or hot water. That steam also can be sent through an absorption chiller and used for refrigeration.
At first glance, this arrangement doesn't sound like it makes economic sense in an era of high petroleum prices. But the newest, small-scale systems run at overall efficiencies in the 80 percent range, Aubrey said, compared to 35 percent or so for a typical utility generator. At today's wholesale prices, using natural gas solely to generate electricity wouldn't produce any real savings, he said. But recovering the thermal energy essentially provides heat for free.
"The thermal savings is the key, especially when you're replacing fuel oil," Aubrey said.
For instance: Half the total energy use in a typical hospital is linked to some form of heat, such as warming water and sanitation. At the hospital Self-Gen is working with, engineers are considering a 3-megawatt gas-fired plant, which will produce enough energy to light 40 large homes and provide heat for 15 of them.
The system could cost roughly $700,000, but would save $175,000 a year on heat, based on today's natural gas prices. The unit would replace roughly one-third of the hospital's heating demand and serve as an emergency back-up system for the utility grid.
Sawmills, food processing plants and electronics assembly plants that have big heating loads also can benefit from on-site power. Ice skating arenas and companies that use a lot of refrigeration are candidates, too.
On-site cogeneration power has been around for decades at paper mills and other large industrial plants that need heat and have waste fuel to burn. They're less common at smaller enterprises, although there was a flurry of interest in Maine in 1999.
With utility deregulation then looming, many companies were considering the economics of on-site power. Aubrey had hoped to take advantage of this interest, launching Self-Gen in 2001.
The startup was initially successful, with several distributed generation projects in southern New England. And it conducted dozens of feasibility studies and pre-engineering designs for businesses in Maine and elsewhere.
But most of these companies, Aubrey said, used the data to negotiate competitive power supply contracts from utilities and wholesale generators. Self-Gen's aspirations went nowhere. Most of Aubrey's business reverted to the engineering work being done by Technical Support Inc., which today has gross revenue of between $800,000 and $1 million.
It's a different story now, as existing contracts expire. The high price of natural gas, burned at central generation plants, is pushing up electric rates. Aubrey is in talks with a sawmill that was paying 5.2 cents per kilowatt hour for power supply. The new rate will be 11 cents.
Rate shock is setting the stage for what Aubrey hopes will be serious commitments to build on-site power plants in Maine. Many companies here already have cut energy use through conservation, he said. The next step is to find cheaper ways to generate power and stay competitive.
"If some of these companies can't get something done about their high energy costs," he warned, "they're going to leave the state."