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 heat.

2. Why is BGE offering this program?

The customer incentives offered by the BGE CHP Program are intended to enhance the economic viability for Commercial and Industrial (C&I) customers to employ CHP to reduce their energy (kWh) consumption as part of the BGE Smart Energy Savers Program.

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

Design and installation incentives total $350/kW for projects under 250 kW and $250/kW for systems 250kW and greater. Subsequent to commissioning of the system a production incentive of $0.07/kWh will be disbursed. 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. Will BGE allow CHP projects to export power to the grid?

No. BGE will not allow any type of export to BGE’s 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?

As stated in the CHP RFP "To be eligible for the BGE EmPOWER incentives, energy produced by the CHP projects must be fully used on site. Projects will be ineligible if there is any export from the site including into PJM or if any energy is 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?

The CHP Application, CHP feasibility study, and TRC need to be submitted for an application to be considered for review. Requirements for the CHP feasibility study are outlined in the CHP Program Manual. Links to download the CHP Application, CHP Program Manual, and the TRC Calculator can be found on the CHP website.

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

The study must be in report format and should 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 RFP for detailed CHP feasibility study requirements.

8. Can a Technical Services Provider (TSP) do the technical analysis and implementation of a project?

A TSP is not allowed to implement a project for which the TSP performed the technical analysis through the BGE Technical Services Program option.

9. Are there any size limits for these projects (i.e. the size of the generation unit)?

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

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

The customer is responsible for obtaining and paying for all necessary permits for their CHP project. They should work closely with their engineering team to obtain the requisite permits. Once the customer receives a Pre-Approval Letter from BGE for incentives, they should first 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?

That is up to the customer. This is a detail that must to be worked out with BGE during the completion of the Interconnection Application.

12. What is the basis of the efficiency calculation?

It is expected for projects to have an efficiency of at least 65% (HHV) for consideration into the program. The efficiency should be calculated using the following equation

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 (i.e. not being used on site) and show what sort of fuel consumption is attributable to the steam that is to be harnessed.