An Engineering-Economic Analysis of Combined Heat and Power Technologies in a μGrid Application

This report describes an investigation at Ernesto Orlando Lawrence Berkeley National Laboratory (Berkeley Lab) of the potential for coupling combined heat and power (CHP) with on-site electricity generation to provide power and heating, and cooling services to customers. This research into distributed energy resources (DER) builds on the concept of the microgrid (uGrid), a semiautonomous grouping of power-generating sources that are placed and operated by and for the benefit of its members. For this investigation, a hypothetical small shopping mall ("Microgrid Oaks") was developed and analyzed for the cost effectiveness of installing CHP to provide the uGrid's energy needs. A uGrid consists of groups of customers pooling energy loads and installing a combination of generation resources that meets the particular uGrid's goals. This study assumes the uGrid is seeking to minimize energy costs. uGrids could operate independently of the macrogrid (the wider power network), but they are usually assumed to be connected, through power electronics, to the macrogrid. The uGrid in this study is assumed to be interconnected to the macrogrid, and can purchase some energy and ancillary services from utility providers. A previous study at Berkeley Lab created the Distributed Energy Resources Customer Adoption Model (DER-CAM), a software tool that optimizes DER technology choices to minimize energy costs for a given customer. Based on input data, including electrical loads and technical and cost specifications of DER equipment, DER-CAM determines the optimal combination of technology and a rudimentary operating schedule required to meet the electrical loads of the customer in the most economical fashion. In these studies, DER is used only to provide electricity to the customer, not cogeneration capability.