Using CHP to Bring Energy Security to Fort Knox

Aug. 23, 2013

The Fort Knox US Army post is no stranger to severe weather. The 109,000-acre base sits in Central Kentucky, just 35 miles from Louisville. Thunderstorms and tornados are far from infrequent here.

The ice storm that hit Fort Knox in January 2009, though, stands out. The freezing temperatures, harsh winds, and heavy ice crippled portions of the base. As the ice storm raged, Fort Knox lost its connection with the local public power utility, Louisville Gas and Electric. As the Central Kentucky region slowly recovered from the storm, many of the buildings at Fort Knox were without power for as many as 10 days.

Fort Knox was far from alone in the region. The ice storm was powerful enough to leave more than 430,000 Kentucky homes and businesses without power. The ice storm caused enough damage to inspire Steve Beshear, Governor of the Commonwealth, to order the largest call-up of forces from the National Guard in Kentucky’s history.

But the situation at Fort Knox could have been worse. The soldiers and military personnel stationed at the base were still able to serve their Central Kentucky region, even with the power outages at the base. Fort officials, though, were determined that the base would never again suffer from such extended outages.

At the same time, the 2007 Energy Independence and Security Act was enacted, and Department of Defense initiatives were requiring a higher and higher level of energy security. These occurrences have spurred a major energy security project at Fort Knox, one relying heavily on combined heat and power onsite generators-better known as CHP systems-to provide both backup power and significant yearly energy savings at the base. Once the project is complete in the summer of 2014, Fort Knox will have a reliable source of backup power when severe weather strikes again. The base will also reduce its energy bill by millions of dollars a year.

The best news? Those yearly energy savings will be high enough to allow the government to quickly cover the costs of planning and installing the new CHP-based power system.

“We are providing a lot of power as part of this project,” says Tom Abele, vice president of business development with Louisville-based Harshaw Trane, the project developer, which is working with base utility energy service contractor and contract holder Nolin RECC on the Fort Knox energy project. “But what is really exciting is that, in terms of payback, it will take Fort Knox fewer than 10 years to realize enough energy savings to completely cover the costs of this project.”

A Big Project
The Fort Knox project is a big one. Louisville-based Whayne Supply Company supplied the power generation side of the project, helping determine the right selection of cogeneration engines to meet the base’s power needs. Fellon-McCord, also based in Louisville, is running the numbers to determine when it makes financial sense for Fort Knox to purchase power from the public grid, and when it’s more economical for the base to generate its own power through the soon-to-be-installed onsite power system.

When all the calculations were done, though, the varied partners and data on this project agreed: CHP was the most effective way to give Fort Knox both the energy security and energy savings that it needs.

“We were hired to provide energy security to the base. The challenge was to do it in a way that paid for itself,” says Abele. “We ran multiple scenarios and considered various solutions to try to accomplish this. We looked at alternative fuels, biodiesel, waste-to-power, coal, big turbines. Nothing made as much sense as CHP.”

This isn’t surprising to proponents of CHP. These systems earn their “combined-heat-and-power” name because they capture the heat that they generate when producing power. Facilities can then use this captured heat in their facilities. This can dramatically lower yearly heating bills.

CHP systems are efficient, too. Facilities that rely on separate heating and power units to provide power, heat, and cooling will consume more energy each year than will those that rely on a CHP system to do all three on its own.

Once the project is complete, Fort Knox will have 44 MW of new electrical-generating equipment for emergency backup use, and to use for onsite generation when buying power from the public utility grid would be at its most expensive. This will allow the base to act as an energy island should another natural or manmade emergency cut off power; with the onsite generators, Fort Knox will be able to generate its own power without having to draw energy from the public grid.

The CHP system is not the only new power option that the base will have available to it. As Abele explains, Nolin, who is the local Utility Energy Service Contract holder and the administrator of the project, is also in the process of installing a 2-MW solar farm on the base, a solar array that will provide Fort Knox with additional power security.

At the same time, Nolin has additional work crews that are performing upgrades to the base’s six power substations, mainly focusing on the stations’ relays and breakers to help create an onsite power microgrid, allowing Fort Knox more control over how it powers its buildings. Fort Knox officials can decide to purchase power directly from the public grid operated by its utility, Nolin, or it can rely on its own smaller microgrid to generate its own power, depending upon when each option makes better financial sense.

In addition to providing this energy security, the new power system will also reduce the base’s energy costs by an impressive $8 million a year. Much of these yearly savings-over $5 million-will come from the CHP systems, and more than $2 million will accumulate whenever Fort Knox generates its own power during peak energy usage times. Electricity is far more expensive during times of peak demand, such as a 95°F Kentucky day in the middle of August. By relying on its onsite generators to produce power during these times of high demand, Fort Knox will see its power bills fall dramatically throughout the year.

Fort Knox will use its yearly energy savings to pay for the entire energy security, and efficiency project, a bill expected to reach about $60 million. With $8 million in energy savings, each year, this means that Fort Knox will be able to cover the project’s price tag in just about seven and a half years. After this payback period ends, the base can simply enjoy the annual energy savings.

Generating Power
The final project will include 21 generators. This includes four CHP engines and seven peak shavers, engines that will allow Fort Knox to shift its power consumption from the public grid, from costly peak demand times to more affordable off-peak times.

According to Abele, 20 of the project’s 44 MW will come in the form of emergency backup power. An additional 16 MW will be used for peak shaving. The final 8 MW come from the system’s CHP engines. The CHP engines will run 24 hours a day, seven days a week, Abele says, generating both power and heat.

Fort Knox will use the heat it captures from its CHP engines for three applications. The base is home to its own hospital, Ireland Army Community Hospital. Hospitals are prime CHP customers because they use so much heat. Not surprisingly, Ireland Army Community Hospital will use the waste heat captured by the new CHP engines to heat the building, sterilize equipment, and cook the food that it serves to patients, medical personnel, and visitors. Abele says that the CHP engines will provide 80% of steam and chilled water that the hospital will need each year.

The base is also home to a large data center, one that needs constant chilled water loads. Again, data centers are frequent investors in CHP because of their appetite for chilled water. The data center at Fort Knox is no exception; the heat from the base’s new CHP engines will provide chilled water for the center throughout the year.

Finally, the captured waste heat will help warm the base’s onsite department store and food court, a sort of miniature indoor mall popular among base personnel and visitors.

Tracy Knapp, commercial business manager for the power systems division of Whayne Supply Company, and a key partner in the project, says that choosing the right mix of engines was an important and challenging task.

Finding the right combination of engines meant taking a close look at Fort Knox and how it operates today.

There was a time when Fort Knox’s main role was as a tank-repair facility. Today, it operates more as a human resources and administrative hub for the US Army. As Knapp says, this new use impacts the Army on a larger scale.

“The importance of providing reliable power there is more critical than it ever has been,” says Knapp.

To find the right mix of generators, the team studied the entire base, considering how each building on the facility interacted with its neighbors. Consideration had to be given to how the heat produced from the CHP engines would be used, something that would help determine where each engine should be placed.

This presented a different type of challenge. Many of the projects of this type consist of just one building. This project included the entire Fort Knox campus, an area with a population that makes it the sixth-largest urban community in the Commonwealth of Kentucky.

“This project is addressing so many needs,” says Knapp. “It’s a big project that comes with a lot of challenges. The goal is to provide reliable power on a large scale. We are lowering the amount of time that Fort Knox will have to pay for peak-demand power, and we are finding uses for the excess heat that the engines capture. That’s a lot to consider. But the CHP systems just made sense this time around. The financial economics never made sense before. Now though, they do.”

The financials make sense today for two main reasons, Knapp says. First, the price of natural gas, the engines’ fuel source, is affordable. Secondly, when the base uses the heat generated by these engines-whether in its hospital, department store, or data center-it doesn’t have to purchase as much of its own heat. This combination makes CHP the affordable choice for this project, Knapp says.

Having CHP engines at the base is a positive. But Fort Knox won’t achieve the maximum amount of yearly energy savings if it doesn’t use these engines properly.

That’s where the project’s economic dispatch model comes into play.

This financial model pinpoints the best times-economically speaking-for the base’s onsite generators to turn themselves on or shut themselves down. The model will determine, too, when it makes the most financial sense for the base to buy power from the grid and when it’s financially smarter to generate its own.

“This is a very progressive model,” says Drew Fellon, president and chief executive officer of Fellon-McCord, the company that worked to develop the dispatch model. “The model will always tell us when it makes the most sense for Fort Knox to purchase its power, and when it makes the most sense for it to generate its own. That’s important. You need this model to realize the greatest amount of savings from installing the CHP systems.”

Fellon says that his company considered a host of variables when working on the model. This included the wholesale and retail costs of gas, the size of the base, the equipment that would make up the onsite power systems, and the total energy load that the base requires at different times of the day.

“This model makes a lot of sense for Fort Knox,” says Fellon. “With it, base officials can really maximize the efficiency of their power system.”

Jason Volz, energy engineer at Harshaw Trane, worked along with Fellon-McCord on the economic dispatch model. He says that the company had to consider, too, the amount of gas that Fort Knox is allowed to burn throughout the year. The base must meet certain environmental regulations based on its permits. If the base burns too much natural gas during the year, it will face steep fines, which is why an economic model that factored this in was important to ensuring that the base would burn only the permitted amount of fuel.

The model must also factor in the required load at each of Fort Knox’s substations, Volz says. And it must include an accurate figure for how much it costs to generate power onsite.

“For every hour that we run a generator, we incur a specific cost,” says Volz. “There are maintenance costs involved. The more you run an engine, the more maintenance it will eventually require. We have to take those costs into account when determining whether generation is the most financially viable option at a given time.”

Currently, the economic energy model has been refined to the point where, every 15 minutes, it can spell out how much power the base should be generating on its own and how much it should be purchasing.

Volz admits that this is impressive. But it’s not good enough. When the model is truly ready to go, it will provide this information on a minute-to-minute basis. As Volz says, if an input changes every 15 seconds, then the completed model will need to provide an update every 15 seconds, too.

“That isn’t happening yet,” says Volz. “But that’s where the model will end up.”

The model will arrive at this point once enough data is inputted into it to allow it to make generation decisions at the minute level. That process is taking place now, Volz says, and will be complete by the time the system is scheduled to go live in the summer of 2014.

Volz is no stranger to forecasting models. But the models are usually more predictable, he said. For instance, if a new chiller or HVAC system is installed in a building, it’s a traditional function for the team to produce a model that determines the yearly energy savings that a building owner can expect.

But with the Fort Knox project, largely because of its scope and multiple facets, the model had to include more moving parts to generate a truly accurate measure of cost savings.

“This project is a lot more fluid,” says Volz. “The model changes daily. There might be population changes at Fort Knox that increase or decrease the amount of power that the base needs. If the price of gas goes up or down, the model has to accommodate that. That type of programming, making sure that you account for all the variables, is a challenge. But, to me, it’s the most interesting programming that you can do when forecasting.”

While this Fort Knox project is just beginning, the team bringing energy security and independence to the Army base all agree that the work they’re doing qualifies as some of the most interesting in their careers.

“We are providing energy independence,” says Abele. “There is nothing more patriotic than that. It’s at the core of America.”

About the Author

Dan Provost

Dan Provost is a technical writer who covers energy efficiency topics.

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