Largest-ever residential heat-and-power cogen could light the way.

Cleaner air, lower electric bills, reliable backup power—all the usual goodies enjoyed by commercial facilities that spend millions for onsite energy plants—are now being enjoyed by 700 or so dwellers of the Clinton Hill Apartments in Brooklyn, NY. Residents own their 13 new microturbine generators outright.

From these they stand to save a projected 10% to 20% on billings from Consolidated Edison—yet still receive grid-connected service as needed.

In the bargain, the co-op apartments will increase in value, the neighborhood will breathe noticeably cleaner air in summertime, and the 12-story elevators and common-area lights will keep burning bright, even during occasional brownouts—all thanks to the replacement of oil-fueled boilers with cleaner cogenerated heat and power.

Commissioned in phases beginning in May, the Clinton Hill Apartments’ energy project is thought to be the largest residential microturbine-driven heat-and-power plant in the nation.

And such a deal! Most of the project’s $1.9 million capital cost is being underwritten by grants and tariff allowances.

Model for Big-City Apartments
Although commonplace in many industries, the owning-your-own-power approach is rare among multifamily residential communities—even though a marriage of the two would seem natural. For one thing, New York City (and several other urban settings) notoriously need more in-city generation, thanks to the daunting difficulties of siting new power plants. In fact, an agency devoted to finding innovative solutions, known as the New York State Energy Research and Development Authority (NYSERDA), would love to see more good projects like the one at Clinton Hill, says Dana Levy, NYSERDA’s program manager for industrial research. Since 1990, he notes, the agency has spent nearly $300 million in awarding hundreds of grants in public-private partnerships like Clinton Hill. Clean, renewable, and cutting-edge technologies are especially favored—solar PVs, wind, biogas, and cogenerated heat and power. The latter portfolio alone, which his section manages, is already producing about 20 MW, and when all of a current 100 or so jobs-in-progress attain fruition, the number will reach 100 MW.

NYSERDA funds are offered, he says, “on an annual competitive solicitation basis.” Winning applicants may then receive 40% of the project’s capital cost, up to $1 million, whichever is less. In CHP, they’re looking to fund “clever applications of the technology ... that could be used as a role model for others ... to follow,” he says, and especially, “early adopters to demonstrate efficient applications where there’s a great opportunity for replication.” The Clinton Hill Apartments fit the profile, Levy says, as such a “pioneer.”

Better still, “One of the most appealing aspects” there was the prospect of installing clean-burning generators, exhaust-heat from which “would effectively replace three 400–horsepower boilers” fueled by relatively high-NOx-yielding residual No. 6 oil. Under a woefully obsolete, “very inefficient process,” this was circulating steam around a 2–acre campus to be condensed into domestic hot water for each apartment. Under the new plan, cogenerated heat would provide a very clean and efficient substitute for half the year or more. This promised “a dramatic impact on air quality” in Brooklyn, he says, “when the ozone season is at its worst” and community residents open their windows wide, exposing them to this unhealthy air.

On the negative side, though, it also should be noted that justifying onsite heat and power for residential buildings faces several hurdles, and this explains why such CHP is rare.

First, there’s the gas-and-electric infrastructure that is usually only geared for homes (and, in this case, for 60-year-old apartments) rather than for supporting multi-kilowatt power plants—and so, too, there are unique issues of noise and safety to address.

Second, there’s typically a great differential in electric utility and gas rates paid by industrial versus residential customers. The latter usually enjoy significantly less per kilowatt-hour; hence, there’s much less urgency to save big dollars by buying a power plant. Likewise, there’s a dearth of capital dollars to invest.

Third, there are differences in the engineering know-how of apartment maintenance staff and managers vis-à-vis industrial plant managers.

Lastly, because residential cogen “success models” are rare, every new proposal is going to play the role of “beta version,” in which there’s no extensive history to draw upon for guidance. Some degree of risk is inevitable.

A microturbine is hoisted to its new home.

Apartment Wanted, Brooklyn Location OK
In 2001, David Ahrens, P.E., of New York-based Energy Spectrum Inc., learned that the Clinton Hill Apartments were up for bid for an electrical upgrade. Envisioned in the job were submetering and new master meters for each of the dozen 12-story buildings, and hence, he says, one interconnect would result for each, enabling “the ability to run parallel with the utility” from that point.

Baddabing! An electrical generator could be neatly spliced in, he realized.

As for the current domestic heat production and need, Ahrens found that this, too, was conveniently sited and configured in each building basement. Better still, the current 1,000–gallon boilers were fueled, as noted, with high-NOx-emitting No. 6 oil.

Baddabing! Clinton Hill would gain tremendously from reduced emissions and from greater fuel efficiency—two alluring benefits that could help justify an equipment change in this context. Very clean exhaust heat from a new natural gas generator could yield plenty of the domestic hot water and eliminate sooty fumes. Every watt of power and joule of heat would be usable.

Ahrens next took this concept to the Clinton Hill Apartment Owners’ Corp. (CHAOC) board, where he patiently explained the basics of heat-and-power cogen and its many advantages. He told them that, even upon gaining ownership and control of their own little mini-power generators on the campus, they’d still enjoy the usual grid-parallel service from Con Ed and would lose nothing there: They would not become islanded. Generators are safe, he says; the sound output from microturbines is very quiet. Monthly bills would likely go down—but this wasn’t a certainty. Although the co-op would need to buy more natural gas than before, it would buy much less oil; and the gas rates move in close synch with electric rates, at least in New York, so there wouldn’t be an unexpected “hit” from an adverse price differential. Finally, air quality would dramatically improve—and apartment values would likely go up, too.

John Dew, president of the CHAOC board, recalls that the co-op owners gave Ahrens a positive but cautious reception. Multiple meetings ensued, month after month, in order to thrash out the many details and to fully engage the community’s 1,221 owners.

For example, to resolve some residents’ concerns about possible noise levels, Dew and others visited two nearby locales that were already equipped with power-generating equipment. First, they visited a “failed” application in Queens, in which ill-suited hardware (a reciprocating engine) had been selected, resulting in noise complaints. When Dew visited it, this plant was being temporarily idled until sound buffers could be installed. Dew then traveled to Long Island to inspect a wholly different and wholly satisfactory result from a microturbine. “Frankly,” he says, “when I walked up to it I didn’t even know it was on. It was that quiet.”

The noise issue, at least, was completely resolved.

But what really excited residents, Ahrens recalls, was when “they discovered that, as things were, they did not have operable lighting in place in case of brownout or blackout.” Hence, “stairwell and hallway lights would go dark,” and the elevators in these 12-story buildings “would discontinue as well.”

Ahrens’s proposal would neatly solve this onerous possibility by operating in a “dual mode,” essentially ensuring continuous electric service, with proposed onsite engines backing up each other. Con Ed power would also remain available as needed.

Then—a bit eerily—amidst this long assessment and persuasion effort by Ahrens, in August 2003 came a major power outage, affecting Brooklyn and the Northeast. Many Clinton Hill residents, as Dew recalls, “were stuck outside during the blackout, because we had no lights in our stairwells.” This dramatically underscored the value of reliable onsite power and made a major impression on residents.

“Clinton Hill Power and Light”... Will it Fly?
Thus, with the board’s tentative go-ahead, Ahrens next needed to gather data in a formal feasibility study to measure electrical and thermal loads over a couple of seasons.

Unlike an industrial plant, which would typically have ready access to historical load data, and plenty of working capital for research, the apartment complex had only rudimentary metering, and no bankroll. Ahrens thus sought and obtained a small five-figure grant from NYSERDA and the US Department of Energy, enabling him to conduct a six-month study. Again, because the study involved residential power, this in itself was quite unusual, he notes,  a “first-of-its-type” study of CHP feasibility in
New York.

To measure the loads, newly installed pulse meters registered electrical profiles at 15-minute intervals. Evaluating these data would be critical both in doing the system design and in plotting eventual operations. A second calculator estimated thermal load for domestic hot water. Software from the Gas Technology Institute crunched the numbers. “We tried to calculate coincidence levels between the two to confirm the optimal system,” says Ahrens, who later developed software of his own, plugging in local rate tariffs.

Next came the issue of which type of hardware to specify. Although there was already a presumptive preference for microturbines, there are in fact two good “standard alternatives” for such applications, the other being a recip engine. “The economics are pretty similar,” notes Ahrens. And the two offer respective tradeoffs. Although recip engines do yield higher power density and a good exhaust-heat profile, compared to microturbines, they also pose assorted challenges: higher emissions, which require additional controls, as well as the noise. Both are easier to correct in an industrial setting than in a high-density urban one, where such issues become even more problematic.

George Angelescu, project manager of UTC Power in nearby Hartford, CT, observes, “Microturbines clearly have an advantage for this kind of application” in that “they’re very quiet and don’t produce much emissions.” UTC was hired for the Clinton Hill project by Rand Engineering and tasked with site design. Angelescu’s team eventually did the installation.

Capstone C60 microturbines, in particular, he adds, using top-mounted heat exchangers to turn the exhaust to hot water, provide a compact profile and footprint.

Based on the data Ahrens provided him, Angelescu determined that the heat output from one 60-kW generator should fully satisfy each building’s demands. As for power, Ahrens had calculated loads for each building at 90 kW and often higher, but never less than 60 kW, except for the smallest structure, doing mixed retail and residential.

Some buildings peak at 180 to 200 kW; thus, grid power would definitely be imported.

Angelescu thus recommended two engines per building—a C60 and a C30, with the first devoted to baseloading, and the smaller for ramping up to meet the daily peaks.

C60s also integrate dual modes, meaning that if the grid goes down while the turbine is off, batteries will power it up to ensure that elevators and hallway and stairway lights stay lit.

Thus, for the seven-building North Campus, a total of seven 60–kW and six 30–kW units were ordered. Combined, they would yield 600 kW for about 700 apartments.

Ahrens notes that they’ll drastically cut co-op electric demand, “especially during the power-critical summer months when electricity is in shortest supply and at its highest price.”

Operationally, the C60s will run at maximum availability year-round (estimated at 92%); daily startup and load-following with the C30s will be driven by a meter pulse. The smaller turbines should run, says Ahrens, about 50%–60% of the time in winter and 70%–80% in summer.

As for engine heat utilization: Each building has a basement boiler room with thick concrete walls and ceilings and 1,000-gallon tank serving the steam loop. These sites were almost ideal for power plants. Angelescu comments that positioning the microturbines’ heat output next to them makes for “a very, very efficient arrangement for the use of ‘free’ hot exhaust to pre-heat water.” Each microturbine produces 375,000 to 390,000 Btus per hour, yielding water at about 140°F, thus providing, he says, “100% of building requirement when all are running.”

Prospective net energy savings would come to about 40%, and Clinton Hill Apartment owners would enjoy, in effect, their own private utility plant.

Gas Delivery: A Key Span Is Added
Installation of microturbines in this neighborhood presented a couple of hurdles and one major obstacle: The applicable New York City building codes allow only for low-pressure cooking gas lines, rather than bigger taps that might be more readily available at, say, an industrial park. Capstone microturbines require 75 psi, controlled via compressor. Thus, a special high-pressure feed had to be extended from a gas main, hundreds of yards away.

Many months of finagling ensued with the local gas utility, Keyspan Energy. In the midst of this, the city fortunately gave a favorable ruling on the code. At last, the new tap was dug across several streets to serve the property—arriving there as a scot-free donation from Keyspan.

Co-op president Dew gratefully acknowledges, “If we had had to pay for high-pressure gas to each of buildings, that would have been very expensive. But fortunately, we never had to find out how. Ultimately they covered the entire cost.”

Pipefitters routed branch lines to four buildings and also to a fifth, which housed an old coal storage room—where it was decided that six Capstones could be more efficiently sited together.

New regulating stations and metering were added.

Apart from the higher-pressure gas feed lines, the only other infrastructure change needed was exterior ducting; this would lift the engines’ exhaust upward in new, 12-story chimneys.

In the feasibility study, one item, as Dew notes, was curiously overlooked and only discovered belatedly: During transport or installation, Capstones may not be tilted beyond a certain angle. Dew recalls: “We knew we could fit them in the rooms, but we hadn’t counted on the fact that you can’t tip them.” Thus, to practice maneuvering them through doors and elevators, cardboard mockups were created. Fortunately, the engines made it in OK!

Finally, grid interconnection required the addition of “a reverse power relay on each building’s electrical system,” Ahrens says. The microturbines’ built-in dual-mode controller enables power to be transferred automatically in the event of emergency, such as power grid interruption. To ensure smooth and safe operation in all modes, Con Ed officials witnessed and tested the hookups.

On this score it should be noted that there’s one huge cost advantage enjoyed by being a residential power owner, as opposed to a commercial one: Under many states’ utility rates, onsite DE adopters might be socked with five- or six-figure interconnection and standby rate charges. But Clinton Hill—because it’s residential and attained certain low-NOx emissions and cogen efficiency standards—got off with almost nothing.

Because the microturbine won't weather an extreme tilt, it was sling-hoisted into place.

Cost and Payback
Thus, for 13 engines yielding 600 kW, the gross tab—before grants and allowances—came to slightly under $2 million. Included were engineering; installation; the value of the donated gas line; and other significant in-kind contributions.

As for payback, thanks to the acquisition of this capital equipment largely from grants, the co-op will see its electric costs drop significantly. Estimates are tricky, but a rough sketch is as follows.

Prior to the addition, Clinton Hill residents were paying, all told, $1,200,000 year for electricity to cover private and common areas—which works out to about $90 per owner.

Now, with the engines running, they’ll yield an estimated 4,000,000 kWh annually, which is expected to provide the apartment owners with savings in several ways. Hefty variable demand charges in summer, for example, “can go up to over $20 per kilowatt per month,” Ahrens notes. On a yearly average this comes out to over $100 per kilowatt, or a total in the $50,000 range per year.

As for fuel costs, natural gas enjoys a 10%–15% rate reduction if used in distributed generation, so here, too, some gains are expected.

All things considered, then, the 13 generators should lower the cost of producing power—averaged over the next five years—to 14 to 16 cents per kilowatt-hour. This compares to buying Con Ed rates at an estimated 17 to 18 cents. Assuming the 3-cent differential pans out, total annual savings may come to about $140,000 per year—money to pay for operation and maintenance, with any balance to be divvied up by residents.

Now comes perhaps the best part: grants and allowances that will essentially pay most of the $1.9 million or $2 million investment.

A generous $400,000 gift arrived from Clean Air Communities (CAC), a nonprofit formed to assist disadvantaged local neighborhoods. Installing natural gas cogen enables tons of reduction in emissions from the old oil burners. As CAC Director Debbi Edelstein notes, Brooklyn residents reportedly suffer one of the highest asthma rates in the country, and the new, cleaner equipment should improve air considerably.

Thanks to this reduction, there’s also a likelihood that the project will qualify for lucrative emission-reduction credits. Although the value hasn’t yet been determined, Levy anticipates the site should be awarded credit for 7 to 10 tons of NOx write-offs. Each ton is currently worth $12,000 to $15,000; hence the total could reach as high as $150,000.

If credits do come, Clinton Hill would be the very first small-scale CHP project in New York state to win them. Thus, he adds, this project is serving “as a pilot case in New York state to develop the emission reduction credit program” more broadly. Success in Brooklyn would become a model for other small CHP emissions traders to emulate.

Kicking in also, the local ISO (regional grid operator) rewards energy-users who invest to achieve reductions in electric use. New York’s ISO grants $90 per kilowatt annually. Total value: $54,000.

A city property tax reduction for installation of capital equipment (called J51) is valued at $300 per kilowatt—$180,000 total, allocated over 12 years.

Above all, of course, the real enabling grant came from NYSERDA. In 2004, the agency awarded $758,500—a subsidy which, incidentally, was maximized by the use of microturbines, qualifying the project under desirable “advanced technology” category.

NYSERDA president and CEO Peter R. Smith, who spoke at the Clinton Hill ribbon cutting, underscored the strategic importance of the project in multiple ways. Throughout the implementation process, the agency had also assigned its own project manager to it, Joe Borowiec.

Safety in Numbers
Levy adds that, besides the pioneering aspects already noted, another useful facet of this project is its equipment array. The 13 Capstones “highlight the value of having modular redundant systems,” he says. Instead of doing what is perhaps a more conventional, industrial-style strategy of buying one big 600-kW or two 300-kW generators, the engineering team—consisting of Ahrens, NYSERDA’s staff, and Angelescu—embraced the concept of diversification with multiple smaller ones. This, says Levy, yields a variety of advantages: More efficient matching of the heat load to the building need means, for example, “they’re able to turn off [one generator] and use the remaining [one] if the situation arises that they don’t need to produce quite so much energy. ... They can always run their generators in the most efficient manner.”

Also, multiple engines will mean easier and tighter load following, as well as a stronger backup redundancy and reliability.

On this last point, still another virtue is that, instead of under-utilizing a generator by having it play a backup role to the grid—“so that it sits cold and idle most of the time,” he says—the active daily use of generators for a combination of “backup” and frontline service is preferable.

This was dramatically demonstrated during the 2003 power outage in the Northeast, when a surprisingly high percentage of standby-only generators failed. Why? Because they’d sat stone still for years. That approach is also a poor use of capital, he adds. By contrast, “these systems at Clinton Hill can run every day to earn their ROI, as well as continuing to run during a power outage.”

All in all, recouping something like two-thirds of the capital cost isn’t a bad start, especially since, as Ahrens notes, “when we initially presented this, we didn’t know if we’d get funding.”

However, after first coming up with the cogen idea in 2001, and having persisted four years to the point of getting a contract, the project and funding gelled along the way in 2004.

There’s still a few hundred-thousand dollars yet for the apartment owners to pay, notes Dew, but he is confident this will be readily recouped from a combination of savings and future allowances and grants that are still pending.

Long-term, co-op owners expect to see modest net reductions on their electric bills initially, especially after the remaining five buildings are equipped, which will occur in phase two.

Beyond that, out-of-pocket cost to the co-op will include maintenance and replacement. Ahrens assisted in locking in a fixed cost to cover five years’ service from UTC Power and Carrier, “so we have predictability, at least for O&M.” Costs will range from 1.8 to 2.2 cents per kWh of production.

Carrier will do around-the-clock remote monitoring; a service center is nearby for quick response. Clinton Hill also has its own mechanics for the boilers and doing spots inspections.

Ultimate payback may arrive as soon as five or six years, after which the real savings for residents will kick in.

Finally, what about the noise concerns that had been raised at first and had canceled a project in Queens?

Fugheddaboudit.

Says Dew: “Our units have operated for awhile now, and frankly we’ve gotten no complaints, because the units are so quiet.” During a dedication ceremony, visitors to the basement that houses six Capstones “could hold a normal conversation,” he adds. The sound level is comparable to that of an air conditioner.

Dew and Ahrens expressed thanks to the CAC, NYSERDA, an advocacy group called the Pace Energy Project, and others who provided support and assistance. Dew sums up: “Now we’re looking forward to completion [of Clinton Hill’s other five buildings]—and more savings.”

La Mesa, CA-based writer David Engle specializes in construction-related topics.

DE - January/February 2007