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TCAAP Energy Integration Resiliency Framework <br />Energy Source Implementation <br /> <br /> <br /> 41 <br />output from the engine generator into the Thumb buildings. For the analysis, the Project Team has <br />assumed that the CHP plant will be located within the Thumb to minimize the cost of electrical <br />distribution to the corporate campus. A summary of the costs are provided in Table 11. <br /> <br />CHP Initial Capital Costs <br /> Traditional Scenario CHP Scenario <br />Heating Plant $800,0001 $1,800,000 <br />HW Distribution Piping $0 $2,000,000 <br />HW Building Connections $0 $120,000 <br />Electric Distribution Infrastructure $0 $700,000 <br />Total Project Cost $800,000 $4,600,000 <br />Note: <br />1. Includes boiler equipment, mechanical equipment and piping, electrical connections, controls, civil construction, direct and <br />indirect costs. <br />Table 11: CHP project initial capital costs <br />The O&M cost difference associated with the proposed CHP project would consist of a long-term <br />service agreement for the gas fired engine. Service contracts for small gas engines can be structured on <br />an hourly basis or annual fixed fee basis. The annual O&M cost assumed for the project is $0.02/kWh <br />which equals $56,000 per year. <br />3.2.4.2. Financial Assumptions and Economics <br />CHP facilities provide energy savings greater than the traditional <br />scenario of purchasing power from the local electric utility and <br />generating thermal energy on-site with gas-fired or oil-fired boilers. <br />The annual life cycle costs of the traditional scenario were <br />compared to that of the proposed CHP plant to determine the <br />overall savings provided by the project. At this stage in the <br />development process, the ultimate owner of the project is yet to be <br />determined and the capital financing structure and funding source <br />is unknown. For the purposes of the assessment, the project was <br />assumed to be structured as a private, non-profit, funded with a <br />cost of capital of 4.7%, financed over 25 years, with the annual <br />debt service paid through energy sales revenues. The basic economic assumptions for the project are <br />provided in Table 12. <br />CHP facilities provide <br />energy savings over the <br />traditional scenario of <br />purchasing power from <br />the local electric utility <br />and generating thermal <br />energy on-site with gas- <br />fired or oil-fired boilers.