— A constant average load for every hour of the year. — Hourly data for three typical days of the year — Hourly data for three typical days of each month
Thermal loads may be in the form of hot water or steam; but system outlet conditions must be specified by the user. The sizing and operating modules permit a variety of alternatives and combinations to be considered. The system may be sized for the base or peak, summer or winter, and electric or thermal load. There is also an option for the user to define the size the system in kilowatts. Once the system size is defined, several operation modes may be selected. The system may be operated in the electric following, thermal following or constantly running modes of operation. Thus, N sizing options and M operations modes define a total of NxM cogeneration alternatives, from which the “best” alternative must be selected. The economic analysis is based on simple payback estimates for the CHP candidates versus a base case or do-nothing scenario. Next, depending on the financing options available, different cash flows may be defined and further economic analysis-based on the Net Present Value of the alternatives—may be performed.
7.4 U.S. COGENERATION LEGISLATION: PURPA
In 1978 the U.S. Congress amended the Federal Power Act by promulgation of the Public Utilities Regulatory Act (PURPA). The Act recognized the energy saving potential of industrial cogeneration and small power plants, the need for real and significant incentives for development of these facilities and the private sector requirement to remain unregulated. PURPA of 1978 eliminated several obstacles to cogeneration so cogenerators can count on “fair” treatment by the local electric utility with regard to interconnection, back-up power supplies, and the sale of excess power. PURPA contains the major federal initiatives regarding cogeneration and small power production. These initiatives are stated as rules and regulations pertaining to PURPA Sections 210 and 201; which were issued in final form in February and March of 1980, respectively. These rules and regulations are discussed in the following sections. Initially, several utilities—especially those with excess capacity-were reticent to buy cogenerated power and have, in the past, contested PURPA. Power (1980) magazine reported several cases in which opposition persisted in some utilities to private cogeneration. But after the Supreme Court ruling in favor of PURPA, more and more utilities are finding that PURPA can work to
their advantage. Polsky and Landry (1987) report that some utilities are changing attitudes and are even investing in cogeneration projects.
7.4.1 PURPA 201*
Section 201 of PURPA requires the Federal Energy Regulatory Commission (FERC) to define the criteria and procedures by which small power producers (SPPs) and cogeneration facilities can obtain qualifying status to receive the rate benefits and exemptions set forth in Section 210 of PURPA. Some PURPA 201 definitions are stated below.
Small Power Production Facility
A “Small Power Production Facility” is a facility that uses biomass, waste, or renewable resources, including wind, solar and water, to produce electric power and is not greater than 80 megawatts. Facilities less than 30 MW are exempt from the Public Utility Holding Co. Act and certain state law and regulation. Plants of 30 to 80 MW which use biomass, may be exempted from the above but may not be exempted from certain sections of the Federal Power Act.
Cogeneration Facility
A “Cogeneration Facility” is a facility which produces electric energy and forms of useful thermal energy (such as heat or steam) used for industrial, commercial, heating or cooling purposes, through the sequential use of energy. A Qualifying Facility (QF) must meet certain minimum efficiency standards as described later. Cogeneration facilities are generally classified as “topping” cycle or “bottoming” cycle facilities.
7.4.2 Qualification of a “Cogeneration Facility” or a “Small Power Production Facility” under PURPA
Cogeneration Facilities To distinguish new cogeneration facilities which will achieve meaningful energy conservation from those which would be “token” facilities producing trivial amounts of either useful heat or power, the FERC rules establish operating and efficiency standards for both topping-cycle and bottom-cycle NEW cogeneration facilities. No efficiency standards are required for EXISTING cogeneration facilities regardless of energy source
*Most of the following sections have been adapted from CFR18 (1990) and Harkins (1980), unless quoted otherwise.