To achieve a long-term reduction in operating costs, one proven strategy is to utilize a process called “Combined Heat and Power” (CHP), also known as co-generation. Co-generation is an integrated system of power production that harvests heat generated during the production of electricity.  The process then utilizes this heat, which would have otherwise been wasted, to efficiently deliver such benefits as space heating and domestic hot water.
 
According to a White Paper issued recently by ConEdison Solutions, one of the country’s largest energy services companies; there has never been a better time for a New York City property owner to implement a co-generation program.
 
The White Paper – posted on the ConEdison Solutions website -- is titled “Combined Heat and Power: How Building Owners can Reap Financial, Environmental, and Resiliency Benefits with Reduced Grid Dependence.”
 
“Co-generation is a wise investment for mid-size to large commercial property owners in New York State – but particularly in the five boroughs of New York City, where multiple parties provide financial incentives to make it not only affordable, but a smart business decision,” said Richard Rathvon, Vice President of Retail Commodity Services at ConEdison Solutions.
 
To calculate the potential savings available through co-generation, the White Paper presents a 1.2-million-square-foot, Class A office building in Manhattan as a hypothetical example.   
 
After investing $3 million in up-front costs -- including installation of a CHP system plus a backup generator to provide energy security and resiliency in the event of grid disruptions -- the hypothetical owner would realize approximate yearly savings and revenue from demand response programs of about $480,000.  The hypothetical property would also receive up to $1 million in incentives available through the New York Independent System Operator (NYISO), the New York State Energy Research and Development Authority (NYSERDA), and Con Edison, the regulated utility serving New York City.
 
Using this example, the investment quickly pays for itself.  Based on conservative fuel price projections, the payback period for the investment amounts to 4.1 years, a term considered highly attractive in the world of energy investment. After that point, all energy savings would help directly lower the property’s bottom-line operating costs for an indefinite period going forward and the building would have back-up generation that it didn’t previously have.
 
Business owners implementing such a strategy are able to work with energy experts at ConEdison Solutions to devise a CHP initiative best suited for their particular commercial property.
 
New York State’s energy infrastructure – coupled with the physical proximity of properties in New York City – contribute to the cost-effectiveness of implementing a co-generation program in this area.
 
Once in place, co-generation also provides the means to reduce peak demand.  Energy providers are in a better position to alleviate stress on the state’s grid. Moreover, decreased usage allows utilities to defer expenditures associated with grid maintenance.  Reduced demand also lowers the need for system-wide expansion that might otherwise be required to serve the ever-growing peak usage levels that would be demanded by end-users.  
 

The White Paper is available at http://bit.ly/conedisonsolutions_combinedheatpower
 
ConEdison Solutions 
www.conedsolutions.com