A Low-carbon future is here: combined heat and power (CHP) systems vs. onsite generation

It’s no secret that every institution plays a critical role in the fight against climate change. And while integrating renewable energy sources such as wind, solar, and hydro have become go-to options for many institutions, there is another, often overlooked solution: combined heat and power (CHP).

CHP, also referred to as cogeneration, has been quietly providing highly efficient electricity and process heat to vital industries, employers, urban centers, and campuses for decades, as noted by the U.S. Office of Energy Efficiency and Renewable Energy. Cogeneration is a proven, cost-effective tool for reducing emissions and furthering sustainability goals.

So, what does CHP entail, and how does it compare to onsite methods of heating and powering buildings?

CHP is an efficient process that combines the production of thermal energy (used for both heating and cooling) and electricity into one process. CHP systems can be configured differently, but they usually consist of a few key components: a heat engine, generator, heat recovery, and electrical interconnection, which are configured into an integrated whole.

Key facts about CHP systems:

  • CHP systems can be located at an individual facility, building, or campus. They can also be combined with district energy or utility resource.
  • CHP is typically employed where there is a need for electricity and thermal energy.
  • All CHP systems involve recovering otherwise-wasted thermal energy to produce useful thermal energy or electricity.
  • As a result, CHP systems require less fuel to produce the same energy output as conventional systems, emitting fewer greenhouse gases and air pollutants.

Although CHP is used in over 4,400 facilities across the U.S., many operations are still powered with conventional separate heat and power (SHP) systems. Unlike CHP, SHP systems are not integrated, meaning they obtain fuel from several sources, such as central fossil-fueled power plants and onsite natural gas heating systems.

To get the complete picture of how CHP compares to SHP, let’s dive into the facts across a few key areas of focus.

Energy efficiency

  • According to the United States Environmental Protection Agency, the average efficiency of fossil-fueled power plants in the United States is 36%. This means that 64% of the energy used to produce electricity at most power plants in the United States is wasted in the form of heat discharged into the atmosphere. 
  • Overall, SHP is 50–55% fuel-efficient. Alternatively, CHP systems typically achieve total system efficiencies of 65-80%, by recovering and using the otherwise-wasted heat from on-site electricity production.
Diagram showing CHP as 45% more efficient than onsite generation.
How CHP systems compare to SHP systems

Cost savings

  • According to the U.S. Department of Energy and the EPA, installing 40 GW of new CHP capacity would save U.S. businesses and industries $10 billion each year in energy costs. These agencies estimate that such an investment would cost about $40 to $80 billion and could pay for itself within four to eight years.
  • CHP systems also reduce energy bills because of their high efficiency. Recurring costs are further reduced because the CHP output reduces the need for electricity purchases.

Sustainability

  • In their CHP Guide, the EPA explains that because CHP systems require less fuel to produce the same energy output as SHP systems, CHP can reduce emissions of greenhouse gases and air pollutants such as nitrogen oxides (NOx) and sulfur dioxide (SO2).
  • A CHP system can operate on various fuel types, such as natural gas, biogas, biomass, and more sustainable alternatives as they become widely available.
  • Currently, the emissions prevented by a single 5 MW CHP system are equivalent to the annual emissions of more than 5,400 passenger vehicles.
Graphic showing C02 emissions comparison of conventional generation vs. combined heat and power
This diagram from the EPA illustrates the CO2 emissions output from electricity and practical thermal energy generation for two systems: (1) a fossil-fuel-fired power plant and a natural gas-fired boiler and (2) a 1 MW reciprocating engine CHP system powered by natural gas.

Growth potential

  • There is enormous growth potential for the CHP market: Global Market Insights forecasts revenue generation within the market to increase from $20 billion in 2016 to over $45 billion by the end of 2024.
  • Investing in CHP systems can also help stimulate local, state, and regional economies through job creation and market development. Demand for raw materials and construction, installation, and maintenance services can create green jobs and develop markets for future sustainable technologies.
  • The potential capacity for CHP also cannot be understated: a U.S. Department of Energy study identified nearly 14 GW of additional technical potential for CHP across more than 5,000 U.S. colleges and universities alone.
Chart showing CHP capacity additions over time
Forecast of potential CHP capacity additions through 2026

Reliability and resiliency

  • CHP systems are more efficient and more resilient, and reliable than conventional methods, especially when configured as part of an advanced microgrid. These systems can be designed to operate independently from the electric grid to enhance facility reliability.
  • Through the onsite generation and improved reliability, facilities can continue operating in the event of a disaster or an interruption of grid-supplied electricity.

A low-carbon future is here

Major U.S. cities like Boston, Cambridge, and Philadelphia are already reaping the benefits of CHP. CHP is integrated with local district energy networks in these communities, delivering low-carbon thermal energy to buildings and campuses across the cities’ urban core.

By leveraging existing district energy infrastructure and CHP, these cities are leading the way in America’s adoption of this powerful technology and forging ahead towards a zero-carbon future.

District energy electrification: the new disruptor in a decarbonizing world

Today, buildings generate a substantial amount of the world’s annual carbon emissions – 40%, to be exact. And while historically it has been difficult and costly for buildings to comply with decarbonization efforts, district energy systems are rising to the challenge. District energy is the new disruptor in a decarbonizing world.

Agile, fuel-agnostic district energy systems can easily switch to lower-carbon, local energy sources at their central facilities. Because these systems deliver thermal energy to multiple buildings and millions of square feet at a time, any swap to lower-carbon fuel sources has a much wider-reaching green impact and costs building owners significantly less than building-by-building retrofits. Making changes or upgrades to conventional onsite boilers or chiller plants at each building is a much more time-consuming and expensive endeavor.

In this way, the electrification of district energy systems is a game changer for the climate, our communities, and our collective future. Such a game changer, in fact, that electrification is the backbone of Vicinity Energy’s commitment to reach net zero carbon emissions across all its operations by 2050.

Electrifying Boston, Cambridge and beyond

In the first initiative of its kind in the United States, Vicinity is already in the process of electrifying our district energy facilities in Boston and Cambridge. Modeled after best-practices in other leading European and Canadian cities, this approach includes the installation of electric boilers, industrial-scale heat pumps, and molten salt thermal battery storage at our central facilities.

Our ability to access power allows us to keep costs down, while also delivering superior reliability. By purchasing electricity from renewable, carbon-neutral energy sources like wind, solar, and hydro, we can provide a cleaner energy product. But we’re not stopping there: over time, we’ll apply our approach to the rest of our districts, with Philadelphia closely following Boston and Cambridge.

The investments Vicinity is making at our central facilities will immediately green the energy serving customers throughout Boston and Cambridge.

So, what will these new investments actually look like and how will this work? The roadmap to net zero includes several key components, as outlined in our latest white paper:

  • Producing renewable energy at transmission level rates and integrating them into our fuel mix
  • Electrifying energy generation by converting our operations to electric boilers and heat pumps
  • Installing molten salt thermal batteries, which will allow us to buy energy when it’s most affordable and store it for use during peak demand

Our phased plan for the electrification of our Boston and Cambridge facilities serves as a sustainable blueprint for our districts around the country, as well as other leading district energy companies like Con Edison in New York City who are looking to us for best-practices in creating their own path to decarbonization.

As Vicinity’s Chief Sustainability Officer Matt O’Malley so aptly stated in an interview: “We only have one choice—that’s to be bold on climate. Vicinity is doing it.”

Electrification success overseas

Vicinity’s plan is built upon best practices, proven technologies, and investments in sustainable infrastructure to reduce our overall environmental impact. And while our strategy is the first of its kind in the U.S., the electrification of district energy systems has proven successful in various European and Canadian cities throughout the years. We plan to build from these best practices and make a similar impact nationwide.

When Finland’s capital Helsinki sought a way to heat the city as sustainably as possible, they launched the international Helsinki Energy Challenge in February of 2020. Finland, like much of the European Union, has ambitious climate regulations in place that require the country to be carbon neutral by 2035, and place a ban on coal from energy production by 2029. With 90% of buildings in Helsinki connected to the city’s district heating system, the outcome of this contest would prove significant.

The solutions that took the prize? Converting to renewable energy sources and electrification.

In conjunction with the shift to renewables in Helsinki’s district heating networks, the contest’s winning solutions are designed to harness renewable electricity from heat pumps to drive the city’s transition to carbon neutrality.

Kaisa-Reeta Koskinen, Manager of the Carbon Neutral Helsinki project, commented on the urgency of the city’s transition: “We have to get rid of fossil fuels fully, and quite quickly. If at this point we start investing into fossil fuels, even if they are not as bad as coal, it is going to be a bad investment.”

Almost a decade earlier, a similar transition took place in the heating networks of Drammen, Norway, with notable success. In 2011, Star Renewable Energy installed the world’s largest 90°C natural heat pump in conjunction with the district energy system in Drammen. The heat pump extracts heat from the cold water in an adjacent fjord to heat homes and businesses across the city.

Since January 2011, the project has delivered over 15MW of heat for the Drammen community of 60,000 people. The city has realized an annual savings of around €2m a year, as well as 1.5m tonnes of carbon — the equivalent of taking more than 300,000 cars off the road each year.

It’s time for the U.S. to take inspiration from these success stories overseas and work harder to reduce our reliance on fossil fuels to heat, cool, and power buildings. The use of electric boilers and heat pumps in district energy systems has long been acknowledged as a proven solution for rapid and cost-effective building decarbonization in urban centers around the world.

Driving change with strategic private-public partnerships

It’s clear that strong policy, regulations and collaboration among organizations, as evidenced by the Helsinki Energy Challenge in Finland, encourage and spur innovative and sustainable solutions to decarbonize our cities. The success of district energy electrification in Drammen demonstrates the power of public-private partnerships (PPP) to achieve widespread decarbonization objectives.

Public-private partnership is essential to the development and evolution of decarbonization programs. The private sector’s knowledge of emerging technologies, in combination with progressive policymaking in the public sector, can accelerate the adoption of greener products and services.

European and Canadian cities such as Vancouver, Helsinki, Drammen and many more serve as testament to the success of leveraging district energy to meet aggressive emissions targets through electrification.

Through advances in policy and utilizing the unique assets we already have, Vicinity Energy’s electrification strategy is poised to lead the charge towards a clean energy future.

To learn more about our electrification strategy, get your free copy of our latest white paper today.

Rising natural gas costs and what they could mean for you

Natural gas prices are the highest they have ever been in over 10 years. In New England especially, this has many worried about the obvious global energy shortage. We are deep into the winter season, where natural gas is critically important to heating homes and businesses. At this crucial juncture, why are gas prices surging, and what can you do to protect yourself and stay warm this winter?

What is the situation?

According to Forbes, natural gas provides upwards of 30% of all American electricity, especially in the wintertime, and has doubled in price year-over-year. In Europe, the situation is even more dire – where prices have peaked to the energy equivalent of paying $180 for a single barrel of oil. Exporting to Europe means our prices also domestically rise, since we end up with a shortage through covering their deficit. This CNN article states that in East Asia, natural gas prices have risen approximately 85% since the start of September 2021, equal to about $204 for a single barrel of oil. It is becoming globally apparent that with the variable weather conditions and the resurgence of demand going into winter, every country is scrambling to acquire enough resources.

It is clear that there is a global energy shortage. Increasing liquefied natural gas (LNG) exports are contributing to rising U.S. natural gas prices by reducing domestic supply, which could have a major effect on New England’s energy markets and reserves this winter, according to FERC staff. Although regions across the country have reserve margins of at least 26%, FERC Chairman Richard Glick warned that that metric of adequate power supply may no longer be valid in the face of extreme weather, which can knock large numbers of power plants offline. New England is particularly at risk in this shortage because it relies solely on one import port and no ground pipelines, which has been affected by global supply chain problems. There are very few gas import terminals, and if there are any issues with a terminal, places like New England, which is not served by a land pipeline and can only receive supply via its import terminal, are at particular risk.

Many energy companies that utilize natural gas are worried about their dwindling backup fuel reserves with the upcoming winter, especially considering the disastrous weather conditions in Texas last year. In 2020, companies had more natural gas storage inventory than in 2021 moving into the winter. This lack of inventory is the first time our supplies have been lower, year-over-year, going into winter.

How can district energy companies like Vicinity help?

While the global energy shortage will impact everyone, there are strong benefits to being part of a district energy system. Here are a few ways Vicinity’s status as a district energy provider will help serve its customers through this global challenge:

  • Vicinity can negotiate fixed prices and better rates due to its superior bargaining power as a participant in wholesale energy markets, compared to a single building purchasing gas for its own boilers.
  • Vicinity monitors customer usage carefully to ensure there are enough supplies to keep all our customers functioning at their normal levels, even during an extreme weather event or a shortage. This is a huge advantage over individual boilers, where building owners must try to anticipate their load and make sure to order enough on an individual basis.
  • Most Vicinity district systems are fuel-agnostic, meaning its generators (chillers, boilers, etc.) can utilize various fuels, including renewable and alternative fuels instead of being at the mercy of gas companies.
  • Vicinity uses a diverse fuel mix, including renewable biogenic fuel, so the company is not reliant on natural gas.
  • Furthermore, with the electric grid’s growing adoption of more renewable sources, Vicinity is working on electrifying its district systems – a move that will drastically reduce its use of natural gas and conventional fossil fuel use.

The global movement away from fossil fuels

Without a doubt, there are challenges ahead for all building owners that rely on natural gas – and not just in terms of cost. As reliance on fossil fuels continue to exacerbate climate related impacts and global leaders implement legislation to aggressively reduce carbon emissions, it’s clear that natural gas is not a progressive or healthy solution for our collective future.

However, despite the global energy shortage, Vicinity is well equipped to navigate these difficult times, unlike buildings with boilers that rely solely on natural gas. With multiple power supplies, back-up generation, and several water and fuel sources, district energy systems are reliable, robust, sustainable, and provide safeguards to ensure 24/7 energy delivery. Like Vicinity, many leading district energy systems (including those in Vancouver and Copenhagen), are implementing innovative strategies, like renewable fuels, heat pumps and electrification, to further reduce its use and reliance on fossil fuels.

The truth is, our society needs to pivot away from fossil fuel use, including natural gas. Fortunately, other much greener energy solutions and technologies exist for buildings. District energy provides a tremendous opportunity for building owners to not only benefit from energy reliability and cost, but also a lower carbon footprint.

VRF vs. district energy: the best way to heat and cool your facility

Modern commercial building managers and landlords have more to consider than ever when it comes to selecting an HVAC solution for their facilities. While energy efficiency, reliability, and cost-effectiveness are still of major importance, factors like sustainability and maximizing circulation due to health concerns are critical considerations as well. In order to stay competitive and attract desirable tenants, facility owners and managers need to look at the full picture when choosing a temperature control solution for their properties.

Two of the most often-considered solutions for building space heating and cooling are Variable Refrigerant Flow (VRF) and district energy. They both offer unique strengths and risks, and a careful analysis of both is necessary to make the smartest decision for your specific situation.

Variable Refrigerant Flow (VRF) systems

VRF is a refrigerant based heating and cooling system that utilizes a central outdoor condenser to feed multiple indoor evaporators. There are two main reasons a developer might choose to go with a VRF system: zoning controls and ductwork. VRF allows for more precise zoning controls, meaning if you need to heat or cool rooms to drastically different temperatures, VRF might be a good choice. Because VRF uses a central outdoor condenser, it also means there is less indoor equipment needed, such as utilizing separate window AC units for every room. This also keeps things quieter indoors.

There are several considerations to keep in mind about VRF systems, however:

  • Capital costs: VRF systems require upfront capital costs to install. Additionally, the average life of a compressor is about 10-15 years, and they range in costs from $5k to $15k in commercial buildings. This means that every 10-15 years, you’ll need to invest more capital to replace multiple compressors.
  • Maintenance: VRF systems consist of multiple complex pieces of equipment which require qualified HVAC mechanics to repair and maintain. This means either keeping HVAC technicians on staff or hiring a vendor each time maintenance or repairs are required.
  • Electricity reliance: VRF systems require electricity to run, which exposes buildings to multiple risks:
    • Buildings are at the mercy of sometimes volatile electricity rates and policy changes that may drive those rates up in the future.
    • Many buildings are billed based on peak electricity usage rates – essentially usage during the hottest and coldest days of the year. VRF can drive up peak demand (and costs) dramatically.
    • In the event of a loss of electricity, such as during a storm, the building would lose heating and cooling as well, which is dangerous to occupants, especially in very warm or cold climates, and could damage equipment and assets in the building.
  • Safety hazards: VRF systems require onsite use of potentially toxic refrigerants, which poses a safety risk to occupants of the building.
  • Space demand: VRF systems are normally housed on rooftops, which precludes that space from being used for building amenities, such as lounges, gardens, or rooftop pools. Additionally, there is a misconception that VRF systems do not require ductwork. Ductwork is certainly required to ensure safe air cycling in a building, especially as a result of COVID-inspired code changes to keep building occupants safe.
  • Reduced structural/building envelope integrity: VRF systems require roof penetration, which exposes the building to potential leaks or other structural issues.

District energy

District energy is a form of energy delivery in which steam and/or chilled water are generated at a central facility and then distributed through a network of underground pipes to buildings, rather than those buildings using onsite boilers or chillers that use fossil fuels. Entirely different from VRF technology, district energy has its own set of considerations when planning for your building’s heating and cooling needs.

There are several attributes to district energy that are worth considering:

  • Reliability: District systems are a great source of reliable energy, whether heating or cooling. The robust underground steel-encased pipes of a district network are reliable even in severe weather, and district energy systems maintain 99.99% uptime. Additionally, because its central facilities are fueled by multiple sources and have bult-in redundancies, reliable district energy cooling and heating is available even in the event of electrical losses. This is critical for the wellbeing of occupants and the protection of sensitive assets and equipment, especially for mission-critical facilities like hospitals, public safety facilities or laboratories.
  • No upfront capital costs: Because district energy does not require cooling or heating equipment onsite, there are typically no upfront costs associated with connecting to a district energy system – unlike the high upfront capital costs required for boilers, chillers, and cooling towers. Many district energy providers are even willing to invest in connecting a building to the district system and will cover the cost of any street repairs and beautification that comes up along the way. Often, existing ductwork in a commercial building can be retrofitted to accommodate district energy.
  • Scalability: District energy can be introduced gradually, if desired. Floors or areas of a building can be added one at a time. It is also possible to submeter for tenants, contrary to common misconception.
  • No rooftop penetration/space demand: District energy does not require rooftop chillers or compressors, freeing up rooftop space for amenities, a solar array, or other storage or equipment needs. This also means no rooftop penetration, which can reduce risk of damage due to a compromised building envelope.
  • Energy savings: Because district energy does not rely on electricity, building peak usage would be much lower than with VRF or installing electric units. That means that variable loads for heating or cooling would be drastically reduced, creating a flat load profile with lower demand charges.
  • Environmental (and financial) benefits: The reduced electricity demand would make a building eligible for more rebates and tax incentives. In some cases, the U.S. Green Building Council also assigns more LEED points to buildings that use district energy.

To summarize, it’s important to consider your reliability needs, ability to make an upfront capital investment, long-term maintenance needs, and sustainability/incentive goals when selecting the right HVAC system for your commercial building space. If you’re looking for some inspiration, click here to check out how other facilities are approaching their heating and cooling needs, from museums, to hospitals, to laboratories, and beyond.

The green way for the bay state to keep warm – and it’s right under our feet

Massachusetts’ new commission on clean heat doesn’t need to look far for a carbon-cutting solution

On the occasion of Climate Week, the Baker Administration made a landmark, first-in-the-nation move to establish a Commission on Clean Heat. Furthering Massachusetts’ national leadership position in pursuit of zero carbon emissions, the Commission’s aim is to greatly reduce emissions from heating fuels. This is a critical task, as nearly 70% of the Commonwealth’s greenhouse gas emissions come from buildings.

While Massachusetts has some of the most ambitious carbon-slashing plans in the U.S., a specific action plan for how to execute these plans remains a hotly debated topic. Electrification, which eliminates onsite fuel combustion in buildings, is the main goal of the new Commission. But there is a large gap between the hundreds of buildings currently converted to electric heat each year, and the stated goal of hundreds of thousands converted each year. It’s no small task for the new Commission on Clean Heat to advise the state on how to reach its ambitious, important carbon reduction plans without burdening residents or building owners with costly retrofits to their properties.

However, there is an accessible pathway to electrification that currently exists under Bostonians’ feet: district energy. District energy is a form of energy delivery in which steam is generated at a central facility and then distributed through a network of underground pipes to buildings, rather than those buildings using onsite boilers, individually combusting, to produce heat. Much of Boston and Cambridge’s most densely populated urban areas are already served by district energy steam. In fact, Vicinity Energy, Boston’s district energy provider, has existing infrastructure that serves 65 million square feet of buildings. Vicinity is currently pursuing its own aggressive electrification plan at its centralized facility in Kendall Square, which could instantly convert all connected buildings to low-emission heating solutions without any new equipment or infrastructure. This is an easy, fast, and cost-effective alternative to retrofitting hundreds of buildings with electric heat pumps.

“It is important for the Commission to consider all options when making their recommendations to Governor Baker next November,” said Bob Rio, Senior Vice President of Government Affairs at Associated Industries of Massachusetts, the state‘s largest business group. “Retrofitting thousands of buildings individually could take decades, and would be a costly burden for business and industrial customers. District energy can be an important tool to help us achieve our goals and it should be a big topic of discussion for the Commission.”

Vicinity has long been working with city and state legislators and stakeholders to educate and build awareness of this critical resource to rapid greening of the region’s heating operations; the benefits are substantial. Hundreds of property owners would not have to invest in re-equipping their facilities, and decades of construction could be avoided.

In the wake of Climate Week, there’s no better time to work together to move closer to the Commonwealth’s important climate goals. Luckily, with existing infrastructure, the way to achieve these goals might already lie right under our feet.

The path to a greener future: electrifying district energy in Boston and Cambridge

Massachusetts is estimated to experience more and more 90+°F days each year, along with increased precipitation, flooding, and rising sea levels. This kind of drastic climate change threatens the health, safety and long-term well-being of our communities.

Recognizing that climate related impacts are directly tied to conventional fossil fuel use and rising greenhouse gas emissions, Massachusetts has bold plans in place to dramatically cut carbon. One of the Commonwealth’s biggest initiatives in its decarbonization roadmap is electrification – a move to leverage the electric grid’s growing adoption of more renewable sources (like offshore wind and solar) to power, heat and cool commercial buildings.

Electrification: the key to achieving Massachusetts’ carbon reduction goals

As part of its Clean Energy and Climate Plan (CECP), the Commonwealth of Massachusetts has a goal to decarbonize and reduce greenhouse gas emissions by 50% of its 1990 baseline by 2030 and reach net carbon zero by 2050. Electrification has been identified as the key tactic to meet this goal, and Boston aims to electrify 300-400 million square feet of commercial space.

However, substituting combustion-fueled technologies (like on site gas boilers and chillers) for electric technologies in commercial buildings is an expensive and time-consuming endeavor. So how can the Commonwealth’s goals be achieved quickly without incurring huge financial burdens on individual building owners? Thankfully, Massachusetts has a tool in its carbon-cutting toolbox: district energy.

Beneath the streets of both Boston and Cambridge, a robust network of pipes is delivering clean steam to over 230 commercial buildings, totaling 65 million square feet of building space – the equivalent of 54 Prudential Towers. Owned and operated by Vicinity Energy, the Boston/Cambridge district energy system generates and distributes clean, low-carbon steam used for heating, cooling, hot water, humidification and sterilization to some of the area’s premier hospitals, biotechnology and pharmaceutical companies, universities, hotels and entertainment venues, commercial space, and government facilities.

Through its Kendall Square cogeneration facility – the largest combined heat and power (CHP) plant in the New England area – Vicinity’s operations are already avoiding over 165,000 tons of CO 2 emissions annually – the equivalent of removing 35,000 cars from the roads each year. While this is certainly a big contribution, the company wants to do even more to reduce its carbon footprint. In line with the Commonwealth’s goal, Vicinity has a commitment to achieve net zero carbon emissions across its operations by 2050.

Vicinity recently integrated biogenic fuel into its fuel mix and is also exploring and testing large-scale use of batteries, hydrogen, and other low-carbon options which will have an immediate effect on the carbon footprint of the businesses we serve. Vicinity has also invested over $110 million in a series of green steam projects to improve efficiencies and further reduce environmental impacts in the Boston and Cambridge area.

While Vicinity’s district energy system is already highly efficient, the company is uniquely positioned to make an even greater positive impact on Massachusetts’ carbon goals. The solution is simple: install large-scale electric boilers and consume renewable energy from the grid as it becomes more readily available. Doing this will benefit each and every building connected to the district energy loop at a fraction of the cost to building owners. Representing 20% of the cities’ total electrification target, thermal electrification of the district system is the solution for rapid and cost-effective building decarbonization. By electrifying our systems, we can – in one swoop – bring Boston and Cambridge much closer to their goal.

The next energy inflection point

“The time to act on electrification is now… A new customer is added to the U.S. gas distribution system every minute – more than 400,000 new gas customers per year. U.S. utilities are adding approximately 10,000 miles of new pipelines and replacing 5,600 miles of existing gas mains annually. These new investments are being amortized over the next 30-80 years, long after we need to stop burning fossil fuels.” –Stephanie Greene, Principal, Building Electrification at Rocky Mountain Institute

The biggest opportunity to green and decarbonize buildings in Boston and Cambridge is to electrify the district energy system. Since the inception of district energy in the late 1800s, district energy systems have routinely migrated to cleaner, more efficient fuel sources. Now we’re at another inflection point and district energy is uniquely positioned to lead through this next energy transition to clean, renewable fuels.

The use of electric boilers and heat pumps in district energy systems is a proven solution. Today, the Stockholm district energy system in Sweden, for instance, uses 660 MW of heat pumps and 300 MW of electric boilers to generate steam, which is distributed throughout the city. It is estimated that altogether, Stockholm’s district energy system has reduced sulfur oxide and particulate emissions by two-thirds since 1986. Vicinity is the first district energy company in the US to put forth a similar plan and intends to convert its existing natural gas infrastructure to electric at its central Kendall cogeneration facility. Sitting next to a major electric substation, Vicinity can import renewable electrons and instantly decarbonize its steam. It’s the “easy switch” for electrification.

Vicinity currently plans to install 100-150 MW of electric boiler capacity by 2028 at Kendall, which can serve up to 75% of its current steam production requirements, or 45 million square feet of building space in Boston and Cambridge. Vicinity’s electrification plan is multi-pronged and will include:

  • Using existing waste energy from heat or river water in order to electrify 10% of its steam load, which is equivalent to 6 million square feet;
  • Installing large-scale electric boilers at the Kendall facility that will convert electricity to steam; and
  • Constructing an additional pipe crossing under the Charles River to connect Boston’s peak winter heating demand with steam generated at the electrified Kendall facility.

This plan will not only support both cities’ goals, it will also eliminate the challenge of property owners needing to retrofit individual buildings. Vicinity’s existing network of 65 million square feet of buildings will automatically benefit from this “easy switch” – saving businesses significant capital and allowing them to instead invest in efficiency and growth.

Looking to the future

Vicinity’s goal, in alignment with the Commonwealth of Massachusetts, is to decarbonize. Electrifying the district energy system is the fastest and most cost-effective way to help achieve this shared goal. Fossil fuels are not sustainable. Through advances in policy and leveraging the unique assets we already have, the Commonwealth is poised to lead the charge in our Nation’s efforts to reduce carbon emissions.

How district energy is supporting the transition from empty offices to thriving laboratories

Office space may be cooling down, but lab space is heating up

The COVID-19 pandemic has had a seismic impact on professional office work environments. Before the pandemic, most workplaces were strictly in-office, but now, the majority have shifted to work from home or a hybrid formula. This transition seems to be sticking, which means many office buildings in urban centers are now standing empty.

One type of work that cannot shift to a ‘work from home’ or hybrid model is laboratory research. Lab technicians require specific equipment and ideal environments that are only available in a physical lab. While the demand for office space has plummeted, the need for lab space is higher than ever. As a result, building owners and developers are converting empty offices into labs at an accelerating rate.

Lab space conversions are increasingly popular in areas experiencing notable life science booms, like Boston, Cambridge, Philadelphia, San Francisco, and San Diego. From 2009 to the end of 2019, the amount of lab space in the U.S. grew from 17 million to 29 million square feet. Even smaller cities like New Haven are “desperate” for more lab space because of a huge influx of life science enterprises on the scene. Boston is expected to complete construction for 2 to 3 million sq. ft. of new lab space by 2024. Lab space vacancy in Boston is currently at a mere 4.5%, versus overall office space vacancy, which is as high as 23%. Rents for lab space in the Boston area price at over $100 per sq. ft., making conversions extremely profitable. Furthermore, lab leases are generally 10 to 15 years long, giving landlords assurance that the conversion investments are worth it.

Lab space has several unique requirements for building owners to consider

Labs require a whole host of structural and service considerations. Efficient, effective laboratories require appropriate ceiling heights for duct work and equipment, enhanced airflow for the safety of technicians, and viable interior wall and ceiling space for increased mechanical and utility requirements. Developers must also keep in mind that different building codes and zoning requirements may apply, as compared to general office space. 

Perhaps most importantly, labs require high-quality and high-volume reliable 24/7 energy to provide power, cooling, heating, humidification and sterilization to ensure uninterrupted research, sanitized laboratory equipment and tools, and preservation of delicate procedures.

Evaluating your energy options

District energy

District energy is a great option to meet the unique requirements of lab space. Life science companies need huge volumes of high-quality, reliable thermal energy to support their critical operations, including specific ventilation, space temperature, humidity requirements, and the sterilization of laboratory tools and equipment. District steam energy has many advantages:
Without the burden of onsite combustion or maintaining chillers or boilers, district energy is a safer option than onsite infrastructure and also requires way less maintenance expense.

  • For sterilization and humidification, the CDC recommends steam sanitation over conventional sanitation methods.
  • District energy is more resilient and reliable even in the face of climate events.
  • District energy allows upper limits of heating to be adjusted, necessary for the specific conditions labs require.
  • A building can connect just a few floors to district energy if they only want to convert some floors to lab space.
  • District energy is a greener option and in cities where life sciences are booming, these same cities often have aggressive carbon emissions savings targets.
  • This energy solution also frees up valuable floor space, which allows life science companies to focus and leverage valuable square feet for their core operations.

Microgrids and distributed generation

A microgrid is an energy grid that typically provides power and thermal energy to a campus or group of buildings in close proximity to each other. In some cases, it makes sense for a research campus to develop an onsite independent energy solution to meet their critical energy needs. Microgrids can even store energy and use renewables. An independent energy developer with finance, engineering and construction management expertise can develop a custom distributed energy solution, from planning to implementation.

Alternatively, microgrids can also be integrated into district systems to provide even more energy resilience and reliability. Labs have extremely high thermal energy and power needs, making a microgrid solution (which provides both) a feasible and practical solution. Vicinity has developed and operates microgrids for multiple clients – including for a global biotechnology company.

Onsite boilers/chillers

Pairing onsite boilers and chillers for thermal energy and engaging a traditional power utility for electricity is often the first option that occurs to many commercial companies and building owners. However, most underestimate the cost and maintenance that goes along with such a decision or the risks to reliability. Onsite chillers and boilers require substantial upfront capital and ongoing maintenance costs. They take up valuable space in the building that easily could be used for core operations instead. Buildings with boilers also run the risk of insufficient steam pressure and poor steam quality. Labs require constant airflow in order to maintain a sterile environment – they need approximately five times more air changes than typical office buildings, which is why they tend to put more strain on the HVAC equipment to heat and cool all the fresh air being brought in. More air changes and ventilation requirements puts enormous pressure on boilers, especially in the winter, as it decreases the life of boilers, increases fuel costs, and means more repairs and maintenance. Not only does district energy or high-pressure steam from a microgrid provide humidification control, hot water, and heat, but it also allows for the sterilization of equipment. More sustainable energy solutions, like district energy and microgrids, often cost less from a lifecycle perspective and are more valuable in the long run.

Looking ahead

As office spaces turn into labs, an important component that life science companies must keep in mind are the carbon goals of the cities they operate in. Many cities have aggressive carbon reduction goals which must be taken into account when planning new commercial and industrial spaces.

Furthermore, many life sciences companies have goals for greening their own operations, sometimes above and beyond city and/or state guidelines. To attract life science companies and stay current with environmental policies, buildings must not only provide a reliable and cost-effective energy solution, but also one that can adapt to changing, and increasingly more stringent, sustainability requirements. This is a tricky matter when it comes to onsite energy generation, as any equipment would likely have to be expensively retrofitted in the future to meet greening initiatives. District energy, on the other hand, can rapidly green its operations with updates to its central plants, with all customers connected to the district system subsequently receiving cleaner energy. Incorporating district energy into any laboratory or office to lab conversion plan ensures not only that new life science tenants will have the HVAC, environmental and space conditions and capacities they need, but also that the building will continue to get greener over time – keeping up with corporate and government sustainability objectives well into the future.

Renewable biogenic fuels are bridging the clean energy gap and supporting local communities

As our world continues to evolve, innovate and move away from conventional fossil-fuel energy sources, new green alternatives are transforming the energy landscape. While wind and solar energy gained early traction in the market, these renewable sources are intermittent and not always available.

However, due to innovative technological advancements and a shift in attitude regarding waste management, the use of biogenic fuels to produce energy has become more prevalent and cost-effective as a viable green energy solution. But what exactly are biogenic fuels and why are they on the rise? Biogenic fuels can be defined broadly as any fuel derived from by living organisms​, such as renewable plant and animal biomass.

The evolution of biogenic fuels

While a lot of effort and new technology is being devoted to biogenic fuel development, this energy source is not a new concept. The use of biogenic fuels has been around ever since human beings discovered fire and has since played a role throughout modern history. Did you know that some of the first automobiles models were developed to run entirely on peanut oil? While innovative, this use of organic matter to produce fuel use was quickly cast into the shadows by fossil-fuels, which boasted greater economic and performance benefits.

However, with experimentation, combined with innovation, this renewable energy source continues to evolve as biogenic fuel producers expand upon prior feedstocks, methods of processing this organic material and end-use applications. This constant development has led to a second-generation of biogenic fuels that differ in the overall sustainability of their feedstocks. And the source of that feedstock is important.

With our society’s rapidly increasing population and demand for power, critics argue that use of key biogenic fuel feedstocks for energy production, such as corn and soybean, would threaten food supplies. This delicate balance between energy needs and food demands is a real concern. However, some innovative biogenic fuel producers are getting more creative with how they’re sourcing their feedstock and transforming organic waste material into energy.

Innovative renewable biogenic fuel from organic waste

As a much cleaner-burning replacement for petroleum-based diesel fuel, one form of biogenic fuels in particular – LR100™– has even more potential to reduce waste, carbon impacts and competing food supply concerns. LR100™ is a one-of-a-kind, unique biogenic fuel derived from waste vegetable oil and fats discarded by the food service industry. While at first glance this biogenic fuel is often mistaken for biodiesel, LR100™ is in fact much different in terms of its carbon footprint, composition and how its developed. Because LR100™ is processed mechanically, it has a 10% lower carbon lifecycle than conventional biodiesel, which uses a chemical process. It also performs much better in boilers and heating systems.Once disposed as waste, used vegetable oil and fats discarded by the food service industry have become a viable feedstock for biogenic fuel producers. It’s estimated by the National Renderers Association that about 4.4 billion pounds of cooking oil is collected annually from restaurants and food service providers in the United States and Canada. Fortunately, a vast majority of this former waste stream is now being repurposed as a fuel source. By leveraging existing and recyclable feedstocks that don’t require additional animal or agricultural production, renewable biogenic fuels do not threaten food supplies. Renewable biogenic fuel also delivers other significant benefits, not only for food service establishments, but also for the environment and local communities.

How biogenic fuel from organic waste is helping the environment and local communities

As a cleaner burning fuel, biogenic fuels derived from used cooking oil and fats are providing cities with both a local, sustainable and circular energy solution that yields positive impacts across local communities and for our environment:

Renewable energy source

  • Derived from plant and animal products, biogenic fuel is a viable alternative to our dependence on fossil-fuels. Its organic properties make it non-toxic and biodegradable, further reducing the risk of spills and mishandling of the fuel.
  • Through renewable biogenic fuel use, we can extend the longevity of our earth’s finite fossil fuel resources, while we continue the transition to other renewable sources.

Environmental

  • Producing renewable energy with this organic food waste significantly reduces greenhouse gas emissions and improves local air quality through reductions in nitrogen oxides, sulfur oxides and particulate emissions, compared to traditional heavy fuel oils.
  • If not disposed of properly, used oil can severely damage municipal water and sewage infrastructure. This oil can create blockages and system degradation and/or spoil local water resources.
  • If this used oil gets into local waterways, it can negatively impact local wildlife and aquatic habitats, leading to habitat destruction.
  • Transforming food waste into renewable fuel offers a closed loop recycling solution for communities and reduces the consumption of finite resources.

Economic

  • Restaurants are often compensated for their used cooking oil, dependent on market demand and quality. Once regarded as a waste byproduct, the food industry is now incentivized to recycle its used cooking oil, while also benefitting from an additional source of income and/or cost savings.
  • Biogenic fuels can often be seamlessly integrated into existing mechanical systems, eliminating the need to replace capital-intensive mechanical equipment that previously used petroleum fuel oil.

Domestic production & job creation

  • Increased use of renewable biogenic fuel can help to limit our energy dependence on foreign nations for finite fossil-fuel based resources.
  • Leveraging local and organic feedstocks to produce renewable biogenic fuel, generates synergistic opportunities for local food industry businesses and the communities in which these businesses operate, including jobs and environmental benefits.
  • According to the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy, “A robust bioeconomy will create domestic high-paying jobs while reducing U.S. dependence on foreign oil and revitalizing rural America,” and create cascading benefits for the transportation, manufacturing, and agricultural sectors.

Although biogenic fuels have existed for thousands of years, the technological advances and environmental demands of today are leading to a resurgence of this type of renewable fuel. While the world’s competing energy needs and sustainability challenges will not be solved with a single renewable fuel source, biogenic fuels are helping to bridge the gap. This circular solution is helping communities adopt better waste management approaches, source renewable energy solutions from their own former waste streams and forge the path forward towards our society’s continued transition to a more sustainable tomorrow.

How the energy industry is forging the path to net zero

In 2018, 33.1 gigatons of energy-related carbon dioxide (CO2) were emitted globally, underscoring the need for immediate action to reduce this staggering number. Put another way, that’s 33.1 billion metric tons, a collective mass equal to 66 times that of all humans on earth.

As greenhouse gas emissions have continued to increase, energy utilities have sought to reduce the amount of CO2 that is released into the atmosphere, as a result of burning traditional fossil fuels.

To combat the rising CO2 levels, many utilities have committed to reach net-zero carbon emissions by either 2030 or 2050. For some, switching to fuel alternatives with lower emissions, such as natural gas, is an interim step to get there, while others look to renewable energy sources, such as wind and solar. While there are many possible paths to reach net zero, one thing is clear: time is of the essence.

But what exactly does net zero carbon emissions mean, and which method of energy production will yield the greatest environmental benefits? Let’s take a closer look.

What is net zero?

The term “net” zero does not mean there are no carbon emissions emitted. At the moment, all fuel-burning energy generation methods emit some carbon. However, after these emissions have been reduced as much as possible, companies can offset the remaining emissions by investing in assets that absorb carbon, such as forests, carbon capture, or other emerging technologies. Those assets effectively cancel out the carbon emissions being produced, resulting in net zero carbon.

Harnessing the power of renewables

Recognizing this need for change, energy utilities have sought alternatives to traditional generation sources to enable continued provision of their essential services. Unlike fossil fuels, such as coal and oil, renewable energy resources are neither extractive, nor reliant on a single resource that depletes over time. Wind, solar, and biofuels are all renewable resources that utilities are investing in to reduce their carbon footprint.

One method for reducing CO2 emissions that can already be utilized is combined heat and power (CHP). Unlike traditional power plants that take excess heat produced during power generation and discard it, CHP efficiently harnesses that excess heat as thermal energy that can be used to keep buildings warm or cool, humidify the air or sterilize equipment. By taking advantage of this resource, utilities can conserve fuel, rather than burn more to produce heat, effectively cutting CO2 production dramatically.

Perhaps what is most exciting about this energy source is that CHP generators can also burn biofuels, such as waste vegetable oil from restaurants or organic matter. By fueling CHP with biofuels, the total amount of carbon emissions produced during energy generation can be additionally decreased.

No matter the method, utilities that choose to utilize the energy potential of renewable resources will see a reduction in carbon emissions. When renewables are combined with generation methods such as CHP systems integrated with biofuels, even greater benefits can be achieved.

The road to net zero

A broad swath of energy generators are shifting to renewables to replace natural gas, especially utilities. Challenges remain, however, especially when it comes to transforming the entire grid to be more environmentally beneficial.

While wind and solar are good renewable resources, they are reliant on ideal weather conditions to produce at maximum efficiency. When there is no wind or sunlight, utilities must turn to other energy sources, such as natural gas, to continue supplying power to the facilities they serve. Although a cleaner resource than burning coal, natural gas does emit CO2 and still contributes to greenhouse gas buildup. Regardless of weather conditions, customers must continue to receive services, and falling back on traditional fuel sources that will produce emissions while providing necessary services is a challenge to decarbonization efforts.

Another obstacle that utilities face is upgrading existing infrastructure. For many utilities, their incumbent grid technology is outdated and ill equipped to accommodate alternative fuel sources that previously were not used or available during the original infrastructure’s development. Because of this, utilities are tasked with not only transitioning to renewables, but also updating systems that have known no other fuel source and were designed for a one-way distribution path. Utilities also have to take into consideration that the majority of U.S. communities leverage onsite boilers for residences and buildings, which means every end user will need to have their infrastructure updated to convert to greener fuels and generation methods as well. The hurdle is a high one – accompanied by a price tag that utilities will have to take into account.

Other facilities have turned to natural gas as a bridge fuel as they shift away from fossil fuels to greener solutions. Though as previously mentioned, natural gas is not carbon-free, although it has a lower carbon footprint than coal or fuel oil. Additionally, those who employ natural gas as a main energy resource may consider transitioning completely away from it to be a daunting challenge. Similar to electric utilities, these organizations will need to seek alternative fuel sources, while also upgrading existing infrastructure, in order to reach net zero. 

In contrast, district energy companies can more quickly transition to renewable fuels and technologies through upgrades at their central plants. Unlike other conventional utilities, upgrades to the distribution system are not required. The improvements made at these central plants, whether this is integrating renewable fuels or converting boilers to renewable electricity, will then benefit all the buildings connected to the district system, dramatically reducing carbon emissions. By nature, district energy is typically found in urban environments, which eliminates the need to transport energy over long distances to customers. It is highly reliable, cost-effective and cuts the amount of fuel that is required by individual buildings using onsite generation. Utilizing renewable resources, energy efficient equipment and green technology at the central plant means that all connected buildings connected to the district become greener. In effect, a district energy system can dramatically reduce the carbon footprints of entire cities relatively quickly and easily.

A greener path

Time is often an overlooked resource, as it is easily spent, but it can never be recouped. As we look to the mid-century, it is crucial that energy utilities explore and implement renewable strategies to reach net zero carbon goals. It is already estimated that global carbon emissions are expected to increase by 0.6% per year until 2050, underscoring the battle against time itself. That equates to more than half a billion additional metric tons per year above 2018 levels.

By harnessing the power of renewable resources, energy providers can dramatically cut carbon emissions and diminish the climate impact of their operations, ushering in a healthier, greener world for generations to come.

The many benefits of CHP for a low-carbon future

When people think about green energy, they often think of renewables like solar or wind power. While harnessing the earth’s natural elements to generate energy is an excellent strategy, these sources are intermittent and not always available. Also, space constraints in urban cores often make these technologies challenging to implement. Integration of wind and solar will certainly be a component of a greener future, but there are many other ways we can reduce emissions, save on fuel, and keep energy affordable by tackling the huge amount of energy wasted under current production conditions.

The United States squanders an incredible amount of energy through wasted heat. This heat, which is a byproduct of traditional energy generation processes, is vented to the atmosphere or released into bodies of water. Traditional generation and the electric grid itself are responsible for the majority of the thermal energy wasted. In fact, the United States loses more energy in wasted heat each year than is consumed by the entire nation of Japan.

One of the best ways to combat this issue is with CHP. By capturing heat that would have otherwise been wasted, CHP systems result in the most efficient use of fuel to produce clean, low carbon steam over traditional generation sources. Let’s take a look at what CHP is, how it works, and how it can help turn waste heat into usable energy to help reduce carbon emissions.

Understanding the CHP process

CHP stands for combined heat and power and is also referred to as cogeneration. CHP is an efficient process that combines the production of thermal energy (used for both heating and cooling) and electricity into one process. Unlike a traditional power plant that discards excess heat produced from its power generation process as carbon emissions, CHP harnesses this waste heat and puts this energy to good use. There are two common CHP processes that are used most often:

  • In the first, fuel is combusted in a prime mover, like a gas turbine or engine. Then, a generator connected to the prime mover produces electricity. The energy normally lost in this process as heat exhaust is recaptured in a heat recovery boiler to generate thermal energy.
  • In the second, a boiler burns fuel and produces high pressure steam, which feeds a steam turbine and thereby creates electricity. Upon exiting the turbine at a lower pressure, the steam is captured and used for thermal energy.

Benefits of CHP

There are many considerable advantages to CHP, both to individual buildings, campuses and society at large. CHP systems have an average efficiency of about 75%, but can exceed 80% efficiency when using steam turbines. This is versus the 50% efficiency yielded by traditional systems via separate boilers and generators. Greater efficiency means better fuel utilization. Better fuel utilization both reduces emissions and reduces costs.

Additionally, unlike many new technologies, CHP systems can be deployed quickly, and have few geographic limitations, making it easier for buildings within a district or campus to take advantage of the benefits of CHP and quickly lower their environmental impact. At the same time, CHP offers more resilient energy, especially when configured as part of an advanced microgrid. This was clearly evidenced in 2012 when Super Storm Sandy plunged New York City into darkness with its destruction of the local electric grid. But one campus stayed lit and heated – New York University’s Washington Square campus, which is powered by a 13.4-megawatt CHP plant.

Furthermore, CHP supports local economic growth by cutting energy costs and freeing up funds for other investments. According to the U.S. Department of Energy and the Environmental Protection Agency, Installing 40 GW of new CHP capacity would save U.S. businesses and industries $10 billion each year in energy costs and shave one percent off of the overall national energy demand. Such an investment would cost about $40 to $80 billion and could pay for itself within four to eight years, these agencies estimate.

A low-carbon future

So, CHP is more efficient, more affordable, and spurs economic growth. What about the environment? For starters, CHP often uses domestic natural gas, which is cleaner than coal and superior to oil from an energy independence perspective. What’s more, opportunity fuels like biofuels and wood waste are also options for CHP systems, offering an even greener approach to CHP. CHP overall, and its ability to integrate green fuels, provides cities with a tremendous opportunity to reduce carbon emissions on a massive scale. By pairing CHP with district energy networks, low carbon thermal energy can be delivered to a broad swath of buildings and generate significant carbon reduction benefits.

CHP’s emissions are inherently lower than alternative technologies, and can meet even the most stringent U.S. emissions regulations. This is partly due to its aforementioned greater fuel efficiency, which reduces greenhouse gas emissions, including carbon dioxide (CO2) and air pollutants such as nitrogen oxides (NOx) and sulfur dioxide (SO2), according to the EPA.

How much of an impact can CHP have on emissions? Let’s put it in perspective. The Department of Energy estimates that the U.S.’s current CHP deployment saves about 1.8 quads of energy annually, and reduces U.S. carbon dioxide emissions by 240 million metric tons. That’s the equivalent of taking 40 million cars off of the road. The DOE goes on to suggest that deploying an additional 40 GW of CHP could decrease CO2 emissions by an additional 150 million tons each year, which is like removing 25 million more cars from the road. In other words, CHP can have a massive positive impact on our environment and pay for itself.

CHP in action

With so many benefits and comparatively little cost to implement, it’s not surprising that in their recent Market Data: Combined Heat and Power in Microgrids report, Guidehouse Insights reported that they expect 11.3 GW of new CHP capacity to be added in microgrids globally over the next ten years.

Unfortunately, most of that implementation continues to be outside of the U.S. As with many progressive energy moves, Scandinavia leads the way. CHP accounts for 50% of Denmark’s power production and more than 30% in Finland and the Netherlands.

However, CHP only represents about 8% of the U.S.’s total generation capacity. That means that there’s enormous potential for growth. Some major U.S. cities are already reaping the benefits of CHP, including Boston, Cambridge and Philadelphia. In these communities, CHP is integrated with local district energy networks, delivering low carbon thermal energy to buildings and campuses across these cities’ urban core. In fact, CHP driven district energy has been so successful at reducing carbon emissions, its specifically tied to these cities’ climate action plans. By leveraging existing district energy infrastructure and CHP, these cities are leading the way in America’s adoption of this powerful technology and forging ahead towards a zero-carbon future.