How Cogeneration Reduced a Hospital’s Electricity Usage by 50%

The Challenge

Trane’s comprehensive approach to helping hospitals optimize energy efficiency and meet sustainability goals was showcased recently at Munson Medical Center in Traverse City, Michigan. One of the region’s largest hospitals, the 442-bed facility occupies a total area of some 1 million square feet and serves as the primary referral center for 24 northern Michigan counties.

The Solution

Technology

Cogeneration, also known as combined heat and power (CHP), is an on-site power generation strategy by which the exhaust heat that’s created by the generator—in this case is powered by natural gas—is recovered instead of being released into the air. The heat is then recycled for use in heating and cooling applications.

A highly efficient solution, cogeneration can provide hospitals with a host of benefits, among them greater resiliency during an outage, flexibility and adaptability in power supply management, and significant cost savings.

“Cogeneration is really beneficial for hospitals because they have a great baseload of electrical usage all year round,” said Brian Langerak, Account Manager at Trane. “Plus, they have steam usage all year round as well as hot water usage. The system can run 24/7/365 and produce electricity, steam and hot water and really make a big dent in utility bills.”

Approach

Trane undertook a comprehensive approach to the project using a data-driven strategy that started with a feasibility study to determine if cogeneration could be installed at the Munson Medical Center with an attractive financial rate of return. Once the study proved positive, the project moved into an investment-grade audit, which included engineered drawings and guaranteed maximum pricing from contractors and suppliers. The final proposal was given the green light to move ahead in short order by the Munson Healthcare executives. Rebates of nearly $1 million through the U.S. Inflation Reduction Act (IRA) pushed the project’s IRR above 20%.

Installation of the cogeneration system into the hospital’s main electrical power grid and steam system proceeded smoothly. Throughout the project, the Trane team helped ensure that the work didn’t impact hospital operations or patient care. Once the solution was installed, the Trane team added the cogeneration system to the hospital’s Trane Ensemble building automation system so the facilities team could manage and monitor the system remotely.  The plant currently provides all the hospital’s power, steam and hot water needs. Combined with their existing emergency generators, it’s capable of providing power to their entire campus during an outage. 

The Results

“Cogeneration projects for healthcare are so beneficial they can become cash positive from literally day one,” said Langerak. And indeed, the new cogeneration plant cut the hospital’s electricity bill by more than 50 percent. As a result of the project Munson Medical Center also reduced its carbon footprint by a full 28 percent.

“As far as operational savings go, we’ve seen right around our projected estimated amounts which were $70,000 a month,” said Ed Belanger, Director of Facilities & Plant Operations, Munson Healthcare. “It’s been a good process, very smooth, well communicated. We are pleased with Trane’s holistic approach. We especially appreciate their understanding of available funding resources, leaving us more resources to devote to direct patient care.”