Cogen Now a Good Fit in Smaller Buildings

Cogeneration, also known as combined heat and power (CHP), is an onsite electricity generating system that captures lost heat and uses it to heat a building’s domestic hot water. The benefits are manifold, including lower utility bills, a reduced carbon footprint, and backup power during a blackout or other natural disaster.

But until now, the economics of cogen have worked only for larger buildings, including co-ops and condos with upwards of 200 units. Today a new generation of smaller generators is coming to market, making cogen suddenly viable for smaller co-ops and condos.

A new 35-kilowatt micro-cogen system is being jointly marketed in the U.S. by its European manufacturer, Tedom, and Tecogen, a Massachusetts-based provider of clean-energy products. One was recently installed in a Brooklyn building, which is saving 30 to 40 percent on its gas and electric bills. The system is best suited to buildings with a range of 80 to 200 units, a market that has been “completely unserved until now,” says Dale Desmarais, Tecogen’s director of business development. “A couple of other companies are attempting to do it now, but we have the highest efficiency of any systems out there.”

The technology requires central piping of hot water to individual rooms, rather than individual water heaters. The cost for the 35-kilowatt micro-cogen unit is about $70,000, which includes a full digital monitoring package, Desmarais says. With installation, the total cost is around $180,000, depending on the complexities of installation.

Desmarais notes that those upfront costs can usually be reduced through the New York State Energy Research and Development Authority’s rebate program, which shaves off $1,800 per kilowatt. In some cases, it can also be matched with incentives available through Con Edison as part of a program to reduce electricity demand in Brooklyn and Queens. Annual energy savings for a system of this size typically range from $35,000 to $60,000, Demarais says. Generally, systems pay for themselves in three to six years.

The Tedom product runs on natural gas, propane, or biogas. In the same way that gasoline powers your car, the gas in this case powers an engine that turns a generator, creating electric power. At the same time, as the engine heats up, the system captures that heat and uses it to raise the temperature of the water in a connected tank.

“Because the cogen unit runs on natural gas to create electricity, you’re displacing the kilowatt hours you would have bought from the utility, and you’re creating it more cheaply,” says Matthew Holland, vice president of business development at Reflective Energy Solutions. “Secondly, you’re now using that steam created by making the electricity to heat the domestic hot water, rather than using your boiler to do so. That covers at least a significant part of water heating, which adds to the return on investment.”

The smaller systems can also be easier to install, since they can fit in a standard freight elevator and through a standard doorway, reports Desmarais. They each weigh roughly 2,000 pounds.

A side benefit to cogen is the green aspect. Because traditional power plants are significant contributors to greenhouse gas emissions, reducing reliance on that power source and switching to a cleaner, more efficient system can reduce a building’s carbon footprint by 40 to 50 percent, according to Desmarais.

But, as always, it’s the cost savings that are helping the technology to catch on. Says Holland: “Most new construction in Manhattan includes cogen now. Hotels are a good application – the savings can be in the six-figure range.”

That should sound like music to the ears of every co-op and condo board.