Evaluation of the Heating Operation and Transmission District: Feasibility of Cogeneration.

Abstract : The General Services Administration, through its National Capital Region, operates a district heating system - called the Heating Operation and Transmission District - that provides steam to approximately 100 government buildings in Washington, D.C. HOTD is examining a host of options that will improve its ability to provide reliable, environmentally sound, and cost-effective service to its customers. This report evaluates one of those options - cogeneration, a technology that would enable HOTD to produce steam and electricity simultaneously. The study concluded that, under current regulations, cogeneration is not attractive economically because the payback period (15 years) exceeds Federal return-on-investment guidelines. However, if the regulatory environment changes to allow wheeling (transmission of power by a non-utility power producer to another user), cogeneration would be attractive; HOTD would save anywhere from $38 million to $118 million and the investment would pay back in 7 to 10 years. Although incorporating cogeneration into the HOTD system has no strong benefit at this time, the report recommends that GSA reevaluate cogeneration in one or two years because Federal regulations regarding wheeling are under review. It also recommends that GSA work with the District of Columbia government to develop standards for cogeneration.