How to Fund Maintenance Backlog with CHP

Posted by Ian Hopkins on 17-Jun-2014 10:00:00

Your CHP could save you enough money to pay for its upkeep and that of other equipment in your plantroom. How’s that for energy efficiency?

Article   How to fund maintenance backlog with CHP

All of your company's equipment has to be maintained, and it's no different with a Combined Heat and Power unit. You may be tempted to use your existing personnel to work on your unit and save on CHP maintenance costs. But what if you could, essentially, pay for highly trained, third-party maintenance with the savings you generate from using a well-maintained CHP?

What are Energy Service Agreements?

Energy Service Agreements, or Energy Service Performance Contracts, can help you get the equipment you need and fund your maintenance backlog.

According to the Combined Heat and Power Association, an energy services approach is one which:

  • Commits a customer and a provider to each other over a period of time.
  • Reduces the up-front costs of energy performance improvements for the customer.
  • Offers a commitment to benefits from improved energy performance and shares these between customer and provider.
  • Enables the customer to transfer risk and responsibility to the service provider.

How can it fund my maintenance needs?

Performance contracting allows a company to use its existing budget to fund facility improvements from operational and utility savings. Capital improvements and all associated costs - i.e. CHP maintenance costs are financed over a period of time.

With an Energy Performance Service Contract (EPSC), a building owner enters into a contract with an Energy Services Company to perform specific improvements and enhancements to the facility. The business or organisation pays nothing upfront. The cost of the unit is paid for in energy bill savings achieved through the more efficient CHP unit. The introduction of Feed in Tariffs for electricity generation from renewable sources mean that revenue can also be used to pay the provider’s initial capital outlay.

According to the Chartered Institution of Building Services Engineers (CISBE), the typical cost of installing a CHP is between £600 and £1,500 per kWe (depending on the unit size). Although CHP represents a sizeable investment, the savings produced can provide a simple payback of around five years, assuming a CHP is running at near or maximum efficiency. This means that the savings generated over the life of the CHP system can provide the funding to carry out other on site maintenance issues and part replacements.

Takeaways:

An Energy Service Agreement will give you access to:

  • Guaranteed savings and levels of service delivery.
  • A solution to your maintenance backlog.
  • A way to reduce site energy consumption, without capital outlay.
  • EU ETS and carbon reductions.
  • Low and zero carbon technology.

Find out more about CHP maintenance options. Get your free eGuide now: The Importance of Lifetime Maintenance

                   

Topics: CHP / Cogeneration, Maintenance

Ian Hopkins

Ian Hopkins is a technical sales professional and business leader with more than 15 years’ experience in delivering energy efficiency projects and strategy in Europe and the United States. Ian currently heads up the Sales and Marketing function as one of the board directors at ENER-G Combined Power Ltd.