The Challenge
Edge Fund, Inc., the owner of a multi-tenant office building at 1540 Broadway in New York City, wanted to find a cost and energy-saving solution to the building’s power needs. In addition to creating savings, this new system would need to enable Edge Fund to create a new revenue stream through the sale of energy.
The Project
Mechanical Energy Solutions worked with Edge Fund to create a customized solution that included a combined heat and power (CHP) cogeneration system, a state-of-the-art building management system, and a 12-year energy service contract that would save millions.
MES installed a 1500 kW cogeneration module (CHP ) that would power the existing electric and mechanical systems. The new CHP unit draws power from a reciprocated engine fueled by natural gas, which is cleaner than and less expensive than using utility-generated electricity.
The system’s exhaust heat recovery exchanger completely replaced the need to draw from utility power sources for heat in the winter and electricity in the summer.
The project integrated a building management and operations system that keeps the owners up-to-speed with energy use, efficiency, and issues that come up periodically. Their energy service contract provides a premium maintenance plan that guarantees a minimum of 95% up-time throughout the year.
The Payoff
By installing and implementing this custom system, MES was able to create enough energy to meet the needs of running 1540 Broadway. They now have the option of submetering and selling the power generated to its commercial tenants for an additional revenue stream. In total, our client has seen:
- A 67% reduction in electric use and more than $2.2 million in cost savings.
- A 73% reduction in steam use and nearly $290,000 in cost savings.
- A total net cost savings of more than $1.8 million.
The creation of a net operating income of more than $1.1 million annually. By choosing to pursue cogeneration as the solution to their needs, our client also qualified for a number of tax deductions and incentives, including:
- A $602,000 federal renewable energy investment tax credit.
- A $1.2 million depreciation deduction.
- Upward of $1.9 million in NYSEDRA incentive dollars.
