This episode of Alternative Power Plays is Part 2 of a discussion with Al Neuner, Vice President of Facilities Operations at Geisinger Health System. To listen to Part 1, click here.
Part 2 of the interview with Mr. Neuner focuses on some of the different types of Combined Heat and Power (CHP)/cogeneration systems that businesses can consider and how Geisinger remains ahead of the curve in this area. Specifically, Geisinger's CHP system was able to significantly lower emissions at its facility, which has led to the facility receiving a handful of awards. Additionally, Mr. Neuner talks about Geisinger's cold water storage system that is part of the CHP, and why that technology is so important for a health system.
This episode is hosted by Alan Seltzer and John Povilaitis, Energy attorneys at Buchanan Ingersoll & Rooney.
For any facility or business considering CHP or more closely examining their energy needs, visit www.BIPC.com/CHP and www.Brattle.com to learn more about how Buchanan and the Brattle Group can help you navigate all the steps involved.
To read more about Al Neuner and Geisinger, visit https://www.geisinger.org/.
John Povilaitis: Welcome back to Alternative Power Plays, the podcast from Buchanan Ingersoll & Rooney and the Brattle Group that talks about new ways in which businesses are getting electricity to their facilities, buildings, and other sites. I am energy attorney John Povilaitis, and I am here with my co-host and colleague at Buchanan, Alan Seltzer. We are joined again by Al Neuner, Vice President of Facilities Operations at Geisinger Health System. If you did not hear Part 1 of our conversation with Al, be sure to check that out. It includes tons of important background on Al’s introduction into the world of combined heat and power and how he deployed the technology at a number of Geisinger facilities across Pennsylvania. Al, thanks for joining us to talk more about your CHP projects. First off, can you tell us what type or types of CHP technology you currently have at Geisinger facilities?
Al Neuner: Sure. At our facilities, we utilize a combustion turbine with natural gas as fuel to power the generator. The exhaust is routed to a heat recovery boiler. The reason for that is that our distribution systems in the hospital are really built around steam systems. So, gas turbine combined with combustion generates the most amount of steam for these units. As opposed to using a reciprocating engine that produces mostly hot water, were we to do something like that. We have had a much greater cost to distribute that heat load out because our central distribution is steam, not hot water. So, we had to go much further into the hospital. So, that’s what drives that decision. Also, gas turbines are a much-reduced maintenance cycle off of the reciprocating engine. So generally, the major maintenance on a gas turbine is about every five years or 40,000 operating hours. So for those reasons, we found it would be the best solution for us.
John Povilaitis: That is interesting, Al. I know you are probably not inclined to bring this up yourself, but has the energy efficiency aspect of these facilities been recognized outside of Geisinger in any way?
Al Neuner: Oh, absolutely. We have won awards. I think one of the ones I am most proud of is the campus In Danville, PA, which previous to our co-generation facilities scored about a 72 on the Energy Star program for hospitals. Then scored a 100, once we had cogeneration installed. It so greatly reduced the BTUs required to maintain this campus that it took us right to the top of the heap for hospitals across the country.
John Povilaitis: That is fantastic, Al. Now, in a world increasingly concerned about environmental impact, CHP systems offer a way for businesses to control their carbon footprint much more than they can when getting electricity from the local electric utility. Am I right about that?
Al Neuner: Oh, absolutely. In fact, it goes beyond environmental. So, yes, with our project in Danville, PA, we made substantial reductions in SO2 emissions and in NOx, mercury emissions by about a ton and a half annually, and about 32,000 tons of CO2 emission, the greenhouse gas, annually. So, very significant things.
But to us as a healthcare provider, even more importantly as you reduce the air pollutants, which effectively increases air quality, you improve the health of the communities we serve. In other words, really dive deep into this and utilize EPA numbers that they maintain in a database for justifying powerplant emissions and things like that. You will find that over the course of our work with two cogenerators, our . It reduces healthcare costs by about $6 million annually. So, aside from just improving air quality, these other benefits extrapolate down into public health. It just makes sense. The cleaner the air, the healthier we all are.
John Povilaitis: Al, that is a great intersection between your CHP facilities and the overall healthcare mission of Geisinger. Now shifting gears a bit, how does Geisinger’s CHP system help with cold water storage and why is that important at a healthcare facility like yours?
Al Neuner: So, managing energy is a multifaceted task. I think I mentioned in the first podcast that we utilize some of the waste we generate in the form of steam to power a steam turbine chiller. So that is what increased our savings from year one to year two. And that was the addition of that steam turbine chiller. So, what that does, in the summer, we fire up this chiller that consumes about 15,000 pounds per hour of steam. It makes essentially 1,500 tons of cooling for free. To help manage our loads, that obviously means we do not always have 1,500 tons a load. We also install a chilled water storage tank at night when we do not have tremendous cool load from the hospital. We continue to make cooling and put it in a tank. It is a million-gallon tank which equates to 8,000-ton hours. Then during the day, the steam turbine chillers stay fully loaded. As we hit the daily peaks, we then draw chilled water from that tank. So, we do not have to burn out any electric chillers or any electric cooling, and then lower our peak on the grid. So, yeah, it all becomes synergistic if you will. We talk today a lot with solar cells and everything else is battery storage. Chilled water storage is nothing more than a battery. A physical battery, where we are making a product at night in chilled water and using it during the day. It is a way to store energy and move its usage to offset peaks during the day.
John Povilaitis: I think that is apt comparison, Al. I think our listeners will get that. Now, I know Alan had some questions about process that he is anxious to pose to you. Take it away, Alan.
Alan Seltzer: Thanks, John. Al, if someone is unsure about moving to CHP, despite all the benefits and things we have talked about in both of our podcasts, what would you tell someone who is really thinking very seriously about moving to CHP, but is a bit unsure?
Al Neuner: Well, I mean, follow the numbers first of all. I mean, does it make economic sense for your facility? What does it cost to implement it? Then I think all of these decisions end up being decisions based on risk. You can look at a certain return on investment (ROI), but what is the risk associated with that? And I would say that the risk for this is extremely low. It is never zero, but it is extremely low compared to let’s say, “Let’s build a new hospital over there and see how many people come.” Right, that is a high-risk venture, because we do not know that we are going to gain market share.
Anything with energy conservation tends to be extremely low risk. So, if your ROI is saying that you should do it, you probably should. The other thing is, it is high tech. When you look at this equipment, it’s like a jet engine and has all kinds of computer controls but yet, the thing functions virtually flawlessly. I mean we rarely have to interact with it. We go down for quarterly service. We have yet to change the oil on the thing after 10 years or so. So, do not be afraid of the technology. The technology is so reliable that it really is not an issue.
Alan Seltzer: Al, that has got to be very comforting I think to a lot of folks that are considering CHP and thinking about it. So, very, very helpful. Thank you so much for that. Can you talk a little bit now, Al, about the process to introduce the CHP facility at a host site? John and I help companies all the time working through all types of contracts in this process. But from the perspective of a host site, what is really involved in making this happen at a host site like Geisinger’s?
Al Neuner: Obviously the first thing is selling it internally and getting the financing committee to do it. So, that will generally entail a feasibility study or some other series of studies to see what it takes to make this actually happen.
Next thing is going to be dealing with DEP. The request for determination to see what type of permit would be required to operate something like this. Then, interacting with the utilities is always a challenge. Just because, A) they are all different and, B) it is going to matter whether or not you plan to export power or not because that will change how they react.
At our facilities, we purposely have not sized them to export power to eliminate that hassle. So, we only generate to ourselves, if you will. And lastly, just some other considerations. Do you want to use this as a blackout site? In the event that there is a random outage, do you want to use island mode so that your campus or hospital can stay in full operation in the event of a northeast blackout or like Superstorm Sandy or some other catastrophic event?
Alan Seltzer: Al, finally for this segment, can you talk a little bit about what advice you might give to businesses and facility managers you know to make the CHP process as easy and as cost-effective as possible? It is obvious that there are a lot of considerations. You have talked about feasibility studies. Working with technology, engineers, and often with utilities, but what is the high-level business takeaways that folks need to really know to try and make this as easy as possible to kind of get to the benefits that you have talked to us about today?
Al Neuner: Well first and foremost, with any cogeneration, you size it on the heat load. You do not start electrically and say, “Well jeez, my campus consumes 15 megawatts. I want to put in a 15-megawatt cogeneration unit.” The reason you size it off heat load is because if you size it off of 15 megawatts and you have all of this excess heat that you are throwing out the stack. You know better often the powerplant, so you are not going to have any environmental benefits, and you are going to lose out on cost benefits because you are going to have the same efficiency the powerplant has.
So, you always start by sizing on how much heat you can use and then kind of the electricity takes a back seat to that and follows. I think secondly is what is the most efficient way to site the thing because all these interconnections with your electric and steam system, and everything else, cost money. So, what is the ideal location that minimizes all those connection costs?
Then, early on, talk to the utilities. Talk to the DEP. Talk to all the parties you are going to need to deal with to get a heads up. Go look at other sites. Learn from others. There are lots of folks like me around that are more than happy to help you through the process. In fact, the government. There is an office in Penn State where they do assistance for CHP. So, there is free assistance available and things like that. Technology assistance. Take advantage of that.
John Povilaitis: Al, on behalf of Alan and I, I want to thank you for joining us and for sharing your deep experience with CHP today. I think it is a conversation many businesses and facility managers considering cogeneration will find incredibly helpful. I also want to thank our listeners for tuning in.
Remember, for any facility or business considering CHP or thinking about their energy options, the team at Buchanan and the Brattle Group have experienced attorneys, CHP experts, and financing pros who can help answer your questions and guide you through every part of the CHP consideration, approval, and installation process. Please visit https://www.bipc.com/CHP and https://www.brattle.com/ to learn more. This is John Povilaitis, and we will see you next time on Alternative Power Plays.