Xcel okayed to buy power from new CHP plant at University of Minnesota

Most power will be for the university, with Xcel power buys to be rare

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The Minnesota Public Utilities Commission on Sept. 1 approved a May 24 application from Northern States Power d/b/a Xcel Energy covering two Power Purchase Agreements and an interconnection agreement with the University of Minnesota for a new, 22.8-MW combined heat and power plant.

One PPA covers a limited amount of test energy during the period beginning in the fall of 2016, and up to the date of commercial operation. The other is a five-year PPA for the net energy and off-load energy delivered, if any, once the combined heat and power (CHP) system has reached commercial operation.

Xcel said that the university has self-certified the project as a qualifying facility (QF) with the Federal Energy Regulatory Commission. Xcel indicated that it has chosen to support development of the project, as it believes it is in the public interest, in part due to the university's status as a state constitutional corporation.

The application noted: "Under the Public Utility Regulatory Policies Act of 1978 (PURPA) and Minnesota’s implementing statute and rules, we are required to purchase all energy and capacity made available by QFs. However, the Company notes that on August 10, 2011, FERC approved the Company’s application to be relieved, on a service territory-wide basis, of the requirement to enter into new contracts or obligations to purchase energy and capacity from QFs that have a net capacity greater than 20 MW. Notwithstanding the PURPA relief granted by FERC, the Company negotiated the attached PPAs with the University of Minnesota as a QF... While not obligated to purchase energy and capacity from the project as a QF due to its size, the Company has worked as a partner with the University to be responsive to their interests and goals by supporting the development of this project."

The university anticipates using most of the energy produced by the project for steam capacity and to meet a portion of its campus electricity load. Power purchases by Xcel from the project would only occur for electricity produced in excess of the university’s load. Therefore it is expected that Xcel would rarely be purchasing electricity under the PPAs.

The CHP project was proposed by the university as a component of its goal to reduce carbon emissions by 50% by 2020. It will enable the university to rely less on its Southeast Steam Plant – itself a CHP facility – which mainly uses natural gas, but still includes a small measure of coal in its fuel mix. The bulk of the carbon emissions reductions from this new CHP system will result from increased system efficiency through the use of the waste heat from the electricity generation process.

Xcel has worked with the university in the past on similar projects to ensure campus needs are met in the most cost-effective manner possible. This includes but is not limited to the development of a cogeneration project in the early 1990s under PURPA, and the development of a feeder cable and duct line lease agreement in early 2000 for a subsequent cogeneration project located at the Southeast Steam Plant.

The university's Minneapolis campus (East and West Bank) encompasses approximately 18 million square feet. That campus includes a total of 163 buildings with growing heating, cooling, and electricity needs. The university identified, through its utility master planning process, a shortage in boiler capacity relative to winter-time peak steam demand on the Minneapolis campus beginning in 2015. This is due in part to aging equipment and the addition of new university buildings requiring steam service. The university has implemented significant energy conservation, but those efforts alone are not able to remedy its growing thermal energy demand.

Project located at the Old Main Heating Plant

It was determined as part of the university’s utility master planning process that the Old Main Heating Plant, if it were renovated, would serve as the best building location to construct the additional capacity to meet the university’s future thermal energy needs, at a significantly lower cost than a remote off-campus site. Old Main was built in 1912 to heat the Minneapolis campus and is currently decommissioned. It previously housed seven coal- and gas-fired boilers, the last of which was shut down for steam production in 2000. The building currently houses a steam pipe fitter workshop area and provides key access points to the deep steam tunnels.

The university intends to add two natural gas-fired turbines as a CHP system with heat recovery steam generators, and to include space for a future package boiler and chilled water plant equipment to create a multi-function Old Main utility building. The CHP equipment represents a two stage configuration.

  • First, a new natural gas-fired turbine will generate electricity for use on the Minneapolis campus.
  • Second, a new heat recovery steam boiler will recover heat from the combustion gases that are discharged from the turbine to generate the required steam capacity.

The CHP system includes a 22.8 MW combustion turbine generator (CTG) in series with a 210 million British thermal units per hour (MMBtu/hr) duct burner. The CTG exhaust gases are used to produce up to 270,000 pounds of steam per hour for the Minneapolis campus steam distribution system. The CHP system can operate under a number of scenarios:

  • CTG full or partial operation with no supplemental duct firing. Steam is produced from only CTG exhaust gas; and
  • Full CTG operation with full or partial duct burner operation.

Steam is produced through a combination of CTG exhaust gas and supplemental duct firing. The CHP system will use natural gas as its primary fuel and distillate oil when gas is curtailed or physically unavailable. The CHP plant will be electrically connected to the Xcel Energy-owned Gopher substation via express feeders GPH 71 and 72 and the Minneapolis campus electric distribution system. The CHP plant will operate continually 24 hours per day, seven days per week to provide steam service to the campus steam distribution system. Planned plant maintenance off-line outages are anticipated to last approximately two to four weeks in total per year during the April–May and September–October periods.

Barry Cassell
About the Author

Barry Cassell

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 26 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.

Barry can be reached at barryc@pennwell.com.

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