May 18, 2007

Renewed Concept

Ontario hospitals seek long-term cogeneration project benefits

Cogeneration choices come down to economics

MARY BAXTER

CORRESPONDENT

LONDON

Although co-generation is a concept which has been around for some time, financial implications of implementing such a system may have hampered popularity.

Cogeneration, which produces both heat and power from the same fuel and reduces greenhouse emissions by recapturing what would otherwise have been waste energy, hasn’t gained wide scale acceptance, says an industry spokesperson.

“There are parts of North America and Europe that use cogeneration much more than we do in Ontario,” said Jake Brooks, executive director of the Association of Power Producers of Ontario.

Brooks said there has been some growth in the use of the approach, which can harness technology ranging from large-scale gas turbines with heat recovery to considerably smaller internal combustion engines.

A steam turbine (above) at the London Health Sciences Centre (below) seems to be the solution for making cogeneration plants financially feasible in a hospital setting.

A provincial program launched last year set a goal to contract 1,000 megawatts (MW) of power from providers using cogeneration. By the fall of 2006, the program had arranged seven contracts for a total of 414 MW.

Ontario hospitals and universities, which have to access hot water 365 days, 24 hours per day each year and need large quantities of electricity, are starting to consider cogeneration more frequently.

In industrial settings where steam is a primary component of the operation, cogeneration is catching on.

It has been used at the Redpath sugar factory in Toronto since the 1950s and today is a mainstay at the London-based CASCO corn wet milling facility and Labatt Breweries.

But “it’s hard to make it (cogeneration) pay,” Brooks admitted, pointing out that the approach makes more sense in jurisdictions where the costs of electricity are much higher compared to gas.

At the London Health Sciences Centre, the decision to adopt cogeneration was a no-brainer.

“We’ve done cogeneration on this site for close to 20 years, said Joe Chiasson, the hospital’s coordinator of energy services.

The hospital’s first cogeneration venture involved setting up an energy-from-waste plant.

“Technically it worked, but economically it just didn’t fly,” Chiasson said, explaining the tipping fees the plant received from the city were not enough to cover the operation costs and so the facility was shut down in 1999.

Along with the challenges of making the venture economically sustainable came the headaches of having to deal with government red tape, mostly to do with the approval process.

The red tape has improved but still exists today, he said, pointing out requirements for engineering studies to approve a particular installation can be “very expensive and unjustifiably so.”

With the installation last year of a steam turbine it looks like the hospital has found a way to make cogeneration financially feasible.

The steam turbine is in addition to a gas turbine that generates five MW of power. The hot gas goes to a heat recovery boiler to make steam to supply heat for the multi-building facility.

The system is used to generate all of the hospital’s heating and electrical needs in the winter and about half of its electrical needs in the summer. Before the steam turbine, a pressure-reducing valve was used to reduce the steam to the levels needed for distribution in the hospital’s heating system.

By replacing the valve with the steam turbine, not only is the pressure reduced but there is also the potential to generate two additional megawatts.

Introducing the steam turbine last year held few surprises.

It’s the fourth major power plant project at the hospital and “we’re kind of used to it now,” Chiasson said.

The hospital obtained third party financing for the project. It will pay down the debt by using the difference between its previous electricity bills and the new, significantly-reduced bills.

Chiasson anticipated it would take about five to 10 years to complete the payback.

Like Brooks, Chiasson said ultimately, the decision to adopt cogeneration comes down to economics. “Is it cheaper to make some of your own electricity or is it not,” he said.

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