Microgrid Viability for Small-Scale Cooling, Heating, and Power

Cooling, heating, and power (CHP) energy systems provide higher fuel efficiency than conventional systems, resulting in reduced fuel consumption, reduced emissions, and other environmental benefits. Until recently the focus of CHP system development has been primarily on medium-scale commercial applications in a limited number of market segments where clear value propositions lead to short term payback. Small-scale integrated CHP systems that show promise of achieving economic viability through significant improvements in fuel utilization have received increased attention lately. In this paper the economic potential is quantified for small-scale (microgrid) integrated CHP systems suitable for groups of buildings with aggregate electric loads in the $15-120kW$ range. Technologies are evaluated for community building groups (CBGs) consisting of aggregation of pure residential entities and combined residential and light commercial entities. Emphasis is on determination of the minimum load size (i.e., the smallest electric and thermal load for a given CBG that is supplied with electric, heating, cooling power from a CHP) for which a microgrid CHP system is both technically and economically viable. In this paper, the operation of the CHP system is parallel with the public utility grid at all times, i.e., the grid is interconnected. Evaluations of CHP technology options using simulation studies in a “three-dimensional” space (CHP technology option, CBG load aggregation, and geographical location in the USA) were evaluated based on comparisons of net present value (NPV). The simulations indicated that as electric load increases, the viability of the CHP system (independent of the system’s size) becomes more favorable. Exceeding a system runtime (utilization) of 70% was shown to pass the break-even line in the NPV analysis. Finally, geographic location was found to have a relatively weak effect on the reported trends. These results suggest that microgrid CHP systems have the potential to be economically viable with relative independence of geographic location if adequately sized to match the specific load requirements.