02/24/2014 05:18 EST | Updated 04/26/2014 05:59 EDT

Cogeneration: Coming to a Building Near You

Cogeneration is an idea as old as the electric power plant itself. In 1882 Thomas Edison's Pearl Street generating station was providing both electricity and heat to lower Manhattan. The leftover steam from the coal-powered turbines was piped to nearby homes and businesses. Despite the inherent efficiency you get from stacking functions, this type of design was cast aside in favour of large centralized electricity generating stations out in the middle of nowhere.

And while these massive power plants might provide electricity at a fairly cheap price in isolation, you need a massive network of wires and infrastructure to get that electricity to the consumer. Also, approximately two thirds of the potential energy you could have extracted is lost up the smokestack as waste heat.

Now, 130 some years later cogeneration has returned as a viable technology in North America and it was the industrial energy consumer who brought cogeneration back from the dead. Pulp and paper, manufacturing, oil sands operations all found that given their demands for heat that cogeneration made a heck of a lot of sense.

In Alberta alone there is 4,000 megawatts of cogeneration capacity up and running. And while the largest cogen plants are found in those industrial applications the technology has scaled down as well. We visited a small 370-kilowatt cogen plant that provides heat and power for the east tower of Oxford's Centenial Place, an office building in downtown Calgary.


* Dan Cloutier of Power EcoSystems next to the 370 kilowatt cogeneration plant he installed in a downtown Calgary office building.

It looks like a giant, scaled up 12 cylinder car engine with insulated pipes coming out of it. And according to Dan Cloutier, the president of Power Eco-Systems, the company that installed the unit, the car analogy is a useful one.

"So the simplified, basic mechanics of it are very similar to a car. Most of the energy that goes into your car is lost as waste heat. So what we're doing is instead of turning a driveshaft our engine is turning a generator and generating electricity and then we're capturing that heat off the engine jacket as well as the exhaust."

That car analogy is also used on the homepage for the national association for cogeneration. If you've driven a car in the winter and turned on the heater you've experienced cogeneration first hand. That's waste heat from the engine that's making the cabin a more comfortable place to be.

And for a large property owner like Oxford, systems like this just make financial sense. Cloutier says there's a three to four-year simple payback on this system and that's including installation costs.

The other big bonus is that even though these things run on natural gas because they're so much more efficient than giant power plants they emit dramatically less greenhouse gas emissions making it eligible for LEED points, BOMA Go Green points and a variety of other programs and incentives. This particular building has a LEED Gold certification. If you want to go even greener they can also be run on biomassbiogas or biodiesel.

"And that's also where we get the cost savings from because we've stepped up our efficiency very dramatically and further we're not paying any distribution, transmission, admin and if you own the equipment you're not even paying GST," says Cloutier.

By cutting the utility out for some or all of your own power you avoid a whole host of fees for transmission and distribution. On a winter's day during work hours the electrical demand for this building hovers around 1,100 kilowatts. That means this power plant is providing a third of the building's electrical demand during peak demand and almost all of the heating required in the building.

Not only does this create a more resilient electric grid, but this kind of self-sufficiency means we have to spend less money to maintain and upgrade the grid over time.

This technology has matured to the point that anyone with a big enough heating or electricity bill could be looking into it. And while the systems go down in size to five kilowatts (one house sized system Cloutier set up cost $24,000) the bigger the system is the better bang you get for your buck.

"If you're under 150 kilowatts you're going to be over a five year payback and if you're over a 150 kilowatt you're going to be a three to five year payback is the rule of thumb," says Cloutier.

In a carbon constrained world where every unit of energy we consume should be doing as much work as possible it's technologies like this that will thrive. The old patterns of thought that allowed those wasteful centralized power plants to be built are fading away, to be replaced by decentralized electricity generation that's closer to the consumer.