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ESPC CHP Project Example

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ESPC CHP Project Example

Project Example: The $36.6 million Aberdeen Proving Ground project was financed through guaranteed energy savings using an Energy Savings Performance Contract (ESPC) between the U.S. Army Corps of Engineers and Johnson Controls. The CHP plant generates 7.9 MW of electricity and produces 34,600 lbs/hr of 350 psig steam unfired and 93,900 lbs/hr with natural gas duct burner supplemental firing. The customer also is directly benefited from $2.5 million in incentives from BGE SmartEnergy Savers Program.

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Energy Savings Performance Contract’s (ESPC) are an additional energy service mechanism that can be used to finance CHP projects. Under an ESPC, an energy service company (ESCO) coordinates installation and maintenance of efficiency equipment in a customer’s facilities. The ESCO typically provides a savings guarantee. The improvements are usually owned by the customer and may be installed with little or no upfront cost if the ESPC is financed. ESPC’s are typcally used for larger, more complex projects with high upfront costs. Financing mechanisms within ESPC’s can also include operating leases and PPA’s.