Combined Heat and Power (CHP) FAQs

1. What is CHP?

CHP stands for “combined heat and power.” It is the simultaneous generation of electricity and useful thermal energy in a single, integrated system.

2. Why is BGE offering this program?

As a part of BGE’s Smart Energy Savers Program®, commercial and industrial customers can take advantage of incentives available through EmPOWER Maryland that can make installing a CHP system more economically viable. CHP systems help customers reduce their energy use and costs.

3. What is the maximum incentive a project could receive?

Design and installation incentives are capped at a total of $350/kW for projects under 250 kW and $250/kW for systems 250 kW and greater. After commissioning the system, customers can receive a production incentive of $0.07/kWh. Both components of the total incentive (design/installation AND production) are capped at $1.25 million each, such that the maximum incentive any one project could receive is $2.5 million.

4. Does BGE allow CHP projects to export power to the grid?

No. BGE doesn’t allow the export of energy to its distribution system under the Combined Heat and Power Program.

5. Can a CHP project be located at one building, Building A, and export excess electricity to another building, Building B?

No. To be eligible for the incentives available through EmPOWER Maryland, CHP projects must fully use the energy on-site. Projects will be ineligible if any energy is exported from the site or used to supply another customer’s facility or multiple facilities owned by the CHP customer, unless the facilities are all part of a campus site or a master-metered account. This prohibition includes providing electricity to another BGE customer or to a building that crosses roads, public lands or another customer’s property.

6. What documents are needed for a proposal to be complete?

You must submit the CHP Application, CHP Feasibility Study and TRC Calculator before BGE will review an application. Requirements for the CHP Feasibility Study are outlined in Appendix A of the CHP Program Manual. Links to all program documents are available for download on the CHP website.

7. What elements need to be included in the CHP Feasibility Study?

The study must be in report format and include the site and project description, project financials, system warranty details, interconnection, permitting and metering plan, project team experience and the anticipated schedule of key project-related activities. Please refer to the detailed requirements for the CHP Feasibility Study in Appendix A of the CHP Program Manual.

8. Can a technical services provider do the technical analysis and implementation of a project?

No. A technical service provider is not allowed to implement a project for which it has performed the technical analysis through BGE’s Technical Services.

9. Are there any limits for these projects regarding the size of the generation unit?

No, but projects larger than 10 MW may require a longer, more complex permitting process.

10. Once a project has been qualified for incentives, what entities must the customer contact for permitting?

Customers are responsible for obtaining and paying for all necessary permits for their CHP projects. They should work closely with their engineering team to obtain the requisite permits. Once the customer receives a preapproval letter from BGE regarding incentives, the next step is to contact BGE regarding interconnection as detailed in the CHP Program Manual.

11. Once a CHP project that receives incentives under this program is operational, can the associated facility use the CHP system as an “emergency” power source if the local BGE distribution system goes down?

Yes. The customer should work out this detail with BGE during completion of the Interconnection Application.

12. What is the basis of the efficiency calculation?

To be considered for the program, BGE expects projects to have an efficiency of at least 65% (high heating value). The efficiency should be calculated using the following equation:

CHP Efficiency (%) = [Annual Electricity Production (Btu) + Annual Waste Heat Captured (Btu)]/Annual CHP Fuel Consumption (Btu) 

13. Can a CHP project be designed around a fuel cell?

Yes, but the fuel cell system needs to meet program requirements.

14. Would BGE consider providing incentives for a project where a steam turbine could be used to capture otherwise wasted steam to turn a generator providing electricity on-site?

BGE would consider such a proposal. The customer should be prepared to explain why the steam was previously being rejected (that is, not being used on-site) and show what sort of fuel consumption is attributable to the steam that is to be harnessed.

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