Duke Energy seeks delay for 21-MW CHP project for Duke University

Duke Energy Carolinas LLC on Dec. 1 asked the North Carolina Utilities Commission to put a hold on its Oct. 17 application for approval of a 21-MW combined heat and power (CHP) project for Duke University.

Dukle Energy Carolinas said that since the application was filed, “the University’s Administration has indicated that it needs more time to work with University stakeholders regarding the role of CHP in the broader context of the University’s sustainability goals. In light of this development, the University has communicated that its internal sustainability and board of trustees verification processes will not be complete by the time of the January 24, 2017 evidentiary hearing. As a result, DEC respectfully requests that the Commission suspend the discovery and procedural dates included in its November 16, 2016 Scheduling Order and set new discovery and procedural dates to begin after May 2017.

“Doing so would allow the University an appropriate amount of time to address internal stakeholder concerns through its sustainability process and receive verification from its board of trustees to proceed with the CHP transaction, and allow the opportunity for continued input by Duke University community and other customer stakeholders in the Commission’s review process for this project. Duke Energy continues to be very optimistic about the CHP Facility, and believes that distributed generation assets such as combined heat and power provide a cost competitive generation asset for North Carolina electric customers, create thermal energy value to the host site, and reduce CO2 emissions for the State of North Carolina.”

The CHP facility is to be built on a site leased from Duke University in Durham County, North Carolina. It will consist of a combustion turbine generator (CTG) for electricity production and a heat recovery steam generator (HRSG) for steam production using waste heat from the CTG. The nominal generation capacity for the facility will be approximately 21 MW of electricity for DEC, 75,000 pounds per hour of steam for the university and 12,000 lbs/hr steam-equivalent for water heating for the university.

The facility is expected to operate al full load at all hours, with an annual capacity factor between 85% and 95%. The source of lhe facility’s fuel will be natural gas from Public Service Co. of North Carolina (PSNC). Additional equipment to support the facility will include building, stacks, fuel gas compressors and black-start capability. The facility will interconnect to the adjacent 44-kV Duke University Station #4, which is jointly owned by DEC and the university. The expected useful life of the equipment is 35 years.

DEC said in the application that it began soliciting interest in CHP from existing large industrial, institutional, and military customers with high minimum steam needs in 2015, and identified the university as one of several interested prospects. CHP is financially beneficial to Duke University because this CHP project can produce and sell steam for less than the university’s ability to self-produce steam using a dedicated gas boiler. The facility will be treated according to traditional rate making conventions as a regulated, rate-based generating asset owned by DEC.

The university is also motivated by the energy security provided by the arrangement of electrical connections that would allow the facility to operate in an “islanded” mode independent of DEC’s electric grid in the event of a wide-spread outage caused by a hurricane or similar event. The additional cost required to enable this capability will be borne by Duke University as an extra facilities charge or similar mechanism.

The land surrounding the project site is used for university utility and facilities functions, including Station #4, Chilled Water Plant #1, back-up diesel generator, vehicle and equipment storage garage, a student parking lot, and woodland.

DEC is a unit of Duke Energy (NYSE: DUK).

As an example of the project blowback, the NC Waste Awareness and Reduction Network (NC WARN) recently asked for and was granted intervention in this case. Members of NC WARN are concerned about the economic, environmental and climate impacts of a “natural gas future,” and the impacts of those costs. Some members of NC WARN are members of the Duke University community of staff, faculty, and students. Many members of NC WARN live near to the proposed plant and may be effected by emissions. The NC WARN office is located approximately two miles from the proposed plant.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.