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FEATURED STORY October 17, 2022

How Combined Heat and Power Can Keep Hospitals, Universities and Other Facilities Running During Severe Weather

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Key Takeaways

  • Severe weather including hurricanes and winter storms can cause power outages that threaten a facility’s ability to stay online and a hospital’s ability to safely and effectively care for patients.
  • Many facilities are turning to combined heat and power (CHP) as their energy-generation solution, rather than purchasing all of their electric power from a local utility or a competitive electricity supplier.
  • Advances in technology, fuel source availability and affordability, and a growing demand for sustainability, are driving a greater interest in CHP than ever before.

As we continue to watch the 2022 hurricane season and learn more about the impact of Hurricane Ian, we urge hospitals, universities, and all kinds of electric-consuming facilities along the Eastern seaboard, to prepare for significant future storm seasons. Power outages in Florida due to Hurricane Ian impacted two million customers as the storm moved inland. While facilities in Florida begin to rebuild in the aftermath, it is crucial to remember that high winds, flooding, smaller hurricanes, tropical storms, summer thunderstorms, as well as, ice or snow storms in the winter months, can cause power outages that threaten a facility's ability to stay online and a hospital's ability to safely and effectively care for patients. Relying solely on the power grid and backup generators to power and cool a facility is becoming a bigger risk as the weather has become increasingly less predictable and, at times, more severe.

That's just one reason why many facilities are turning to combined heat and power (CHP) as their energy-generation solution. Advances in technology, fuel source availability and affordability, and a growing demand for sustainability, are driving a greater interest in CHP than ever before. Today, schools and universities, hospitals, assisted living facilities, retirement communities, and plenty of other large- and small-scale electric-consuming facilities are seeing the benefits of CHP. Rather than purchasing all of their electric power from a local utility or a competitive electricity supplier, facilities now can use CHP, also known as cogeneration, to generate all or a portion of their own reliable power on-site.

Under a traditional power system approach, facilities rely on grid-supplied electricity to power a given facility, and a separate boiler to produce steam used to heat the site or provide other steam-related services. CHP systems, however, integrate these functions using low-cost natural gas or other fuels to power an engine and create electricity for the facility. Excess thermal energy, the by-product of the electric generation, is recaptured and used, sometimes in conjunction with modern updated boilers, for heating or cooling the facility, with some facilities even garnering revenues from being selling additional excess electric power back to the local utility under what's called "net metering."

The key with CHP systems is greater energy and cost reliability

At many facilities, a power outage disrupts business and cuts productivity. At hospitals and other healthcare facilities, it puts patients' lives at risk. By operating on a microgrid, CHP facilities have greater resiliency against hurricanes, severe storms and other natural disasters that create grid-level blackouts and brownouts. Conversely, the underground natural gas pipelines that often fuel CHP systems are less at risk of damage from heavy winds and extreme weather.

Additionally, CHP systems give facilities more predictable energy costs over the long-term and can help avoid market price fluctuations for electricity. CHP systems also offer the opportunity to use low-cost fuels in efficiently, allowing for that reduced energy consumption to become a revenue source through net metering.

Beyond reliability, CHP systems should be the go-to solution for those facilities with aging infrastructure.

For many facilities in need of infrastructure upgrades, the benefits of CHP have been known but the limitations of the technology have previously made it unsuitable for smaller facilities due to the capital expenditure and expected Return on Investment (ROI). That's no longer the case. Technology advancements make CHP systems ideal for facilities large and small, especially with the potential damage severe weather can bring to those with outdated infrastructure or in remote areas with limited points of access.

According to some estimates from the Department of Energy, most CHP system development costs can be recovered within 10 years, and often significantly sooner. There are opportunities to create long-term partnerships with organizations to cover upfront costs, and a number of tax incentives and rebates are often available. All that said, navigating new partnerships, regulatory concerns and cost projections can be complex. It requires the right partner to help companies explore those options and make the best decision for their facilities' particular needs.

CHP systems also allow facilities to reduce their carbon footprint and impact on climate change.

Many organizations are now more than ever putting greater emphasis on cutting their greenhouse gas emissions, and CHP systems offer a positive step toward sustainability. There's also an opportunity to integrate renewable energy sources, including solar power and battery storage, into CHP systems. CHP projects can also integrate modern energy controls and more efficient lighting as components of a complete energy services package. The Department of Energy also estimates that CHP systems can avoid up to 60% of carbon dioxide emissions between 2006 and 2030.

Finding the right approach to CHP

For organizations that want to protect themselves from severe weather and upgrade their energy system, the options for deploying CHP systems are greater than ever. Facilities have the option of designing and building the system themselves, contracting with a third-party developer, working with a utility, or even combining with other nearby likeminded building owners to create a microgrid.

To learn more about introducing a CHP system to your facility, listen to our interview with Al Neuner, Vice President of Facilities Operations at Geisinger Health System on the podcast Alternative Power Plays. Mr. Neuner is a pioneer in the development of CHP systems, having done so at Geisinger's flagship hospital and healthcare site in Central Pennsylvania in the late 1990s. Since then, the system has delivered Geisinger consistently reliable energy in addition to millions in energy savings.

At Buchanan Ingersoll & Rooney, we have extensive experience helping numerous organizations across industries develop CHP systems, including finding the right partners, draft and negotiating key CHP system contracts, securing regulatory approvals, and more. With hurricane season upon us and increasing weather challenges each year, CHP systems are a smart option for facilities to keep the power running.

ALM expressly disclaims any express or implied warranty regarding the OnPractice Content, including any implied warranty that the OnPractice Content is accurate, has been corrected or is otherwise free from errors.

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