The NYSERDA CHP Acceleration Program is structured to drive market transformation by endorsing commercially available, pre-engineered/pre-packaged, modular combined-heat-and-power (CHP) products as plug-and-play appliances and provide all of the ease and assurances that conveys. By developing a comprehensive program that offers a catalog of pre-approved makes and models of pre-engineered modular CHP units, and by identifying a single party (the module vendor) as the go-to entity for the resolution of all issues pertaining to the purchase, installation, maintenance, and performance of each system installed (with Program assistance), the CHP Acceleration Program could serve as a model for multi-state standardization, which could be a real game-changer for the CHP marketplace.

Since 1975, the New York State Energy Research and Development Authority (NYSERDA) has worked to advance innovative energy solutions in ways that improve New York’s economy and environment. In 2012, drawing from years of experience with CHP programs, NYSERDA launched the CHP Acceleration Program, which focuses on modular CHP systems from 50 kW to 1.3 MW (NYSERDA also has a companion program for CHP systems larger than 1.3 MW).

CHP systems are able to capture waste heat from commercial and industrial-scale electrical or mechanical power generation and use it to provide heat and power for multifamily, commercial, institutional, and industrial sites or local communities. The CHP marketplace in New York has traditionally been very fragmented and compartmentalized. To address this issue, NYSERDA has coordinated with utilities to vet and approve commercially available, pre-engineered and pre-packaged CHP units and to identify approved vendors for the modules.

NYSERDA also developed an outreach and marketing campaign to drive customer awareness of CHP; and it has funded support services for CHP deployment (primarily to customers), which included re-commissioning services; technical assistance to program participants; CHP system performance data collection and website display; CHP Expo events (matching customers and vendors); and hosting Technical conferences for CHP professionals.

The program was launched in 2012 with a list of pre-approved modules consisting of 36 systems offered by eight vendors, and has recently been expanded to 141 systems offered by 13 vendors. NYSERDA vets the quality, reliability, durability, and integrated consistency/harmony of the specific CHP modules, which builds customer confidence, increases standardization, minimizes custom engineering, lowers acquisition costs, and leads to quicker decision-making. A project developer or design team can then select from a menu an appropriate module package that matches a potential installation site.

The program’s strategy of identifying and selecting equipment vendors of the modules also provides multiple benefits. The system vendor is responsible for resolution of all issues pertaining to the purchase, installation, maintenance and performance of each system. They become an integral part of the design team early in the design process, thereby reducing the likelihood of incompatible or sub-optimal designs and allowing the vendors to be the repository for lessons learned regarding their equipment. The program provides transparency that allows customers to compare prices from different vendors and also enables vendors to offer firm pricing that takes into account financial support offered by NYSERDA.

Addressing Market Barriers to CHP Deployment

NYSERDA’s CHP Acceleration Program is addressing the system of CHP purchasing in New York, making it more streamlined, cost-efficient, and effective, while providing benefits to both customers and vendors. The $60 million program budget is expected to leverage $90 million in private capital and reduce peak electric load by 37.5 MW. The program offers support for installation of approved modules, support services, technical assistance, system performance data collection, and other activities.    

Importantly, the CHP Acceleration Program will further the public policy goals of increased grid reliability and resiliency. Specifically, all supported CHP systems must have the ability to run in parallel with the utility grid to save energy and reduce energy costs on an everyday basis, and must also have the ability to run independently during a grid outage to provide resilient power to priority loads at the site.  Additional financial support is offered for CHP systems installed to support critical infrastructure, such as facilities of refuge or those that provide emergency services.

Although only halfway through the program, results are already very positive. There is much greater participation in this CHP Acceleration Program than in NYSERDA’s previous CHP programs, and CHP systems are being deployed much faster. In the first 18 months of the program, 29 project applications were received. Twelve of those projects already have equipment on-site. One project was temporarily paused by a proposer, but has since restarted. The program has experienced zero attrition.

A Model for Other States

The NYSERDA CHP Acceleration Program supports market transformation by:

• Eliminating an “arms-length purchase” transactions that could leave out crucial details from the equipment vendor and cause project deficiencies due to compartmentalization of the project’s design team.
• Partnering with technology developers to vet the performance of emerging modules that appear to be on course for eventual enrollment into the program.
• Creating long-term relationships between parties, thus increasing each party’s vested interest in continuously striving toward success.
• Engendering customer confidence, which is leading to quicker decision-making cycles.
• Providing transparency that enhances the opportunity for customers to compare prices from different vendors, and enables vendors to offer firm pricing that takes into account the financial support offered by NYSERDA.
• Re-aligning the role of consulting engineers so they provide added value to customers during the system selection process.

NYSERDA’s CHP Acceleration Program is a model that other states should emulate. The agency hopes that its catalog of pre-approved modules will be adopted by other states and become a national list of approved CHP equipment. Other states are already beginning to look at NYSERDA’s CHP Acceleration Program to see how they can build on it. 

The CHP Acceleration Program was one of eight recipients of the 2014 State Leadership in Clean Energy Awards, an initiative of the Clean Energy States Alliance (CESA) to highlight exemplary state and municipal programs that advance clean energy markets. (See my previous blog from November 24, 2014.) CESA will be hosting a webinar featuring this program on December 16th. The webinar is free to attend, but registration is required. You can learn more and register here or visit www.cesa.org.