First TTcogen CHP Unit In Operation, Second and Third in the Pipeline
In May 2016, two of the most established names in the packaged cogeneration industry formed the 50/50 joint venture TTcogen.
The two parent companies, Tecogen (TGEN – $4.07) from the United States and TEDOM from Europe, combined their expertise, knowledge, and CHP modules to form the premier packaged CHP provider with the widest range available in the United States. TTcogen offers 27 different CHP modules, ranging in size from 35 kW up to 4 MW. The full product portfolio addresses the needs of commercial, residential and industrial facilities in every size category.
Soon after the formation of the JV, the initial sale was booked for a TEDOM Micro 35 kW Combined Heat and Power unit. The CHP was to be installed in a 138 unit multi-family residential building in Brooklyn, NY. Close on the heels of the initial one, the second order was received from an elementary school in New Jersey.
With a less than 3 year payback period after incentive rebates and annual savings estimated to be in excess of $60,000, the Micro 35 kW unit is a natural fit for the residential building.
The compact natural gas powered unit – it has dimensions of only 76.8” L x 64.8” W x 72.3” H – is able to serve nearly the entirety of the building’s domestic hot water load while also producing between 40% and 60% of the building’s electric demand. In addition, the ‘blackstart’ capability of the Micro 35 allows it to provide power to the building in case of a blackout.
Moreover, because of the compact size of the Micro 35, the unit is easy to retrofit to existing buildings. The simpler installation reduces the time required for installation construction, moderating disruption for residents.
Speaking about the Micro T35, Jiri Jansa, TEDOM Regional Sales Director and TTcogen Managing Director, noted, “The TEDOM Micro T35 has been installed in hundreds of locations around Europe and we are excited to bring this compact product to the United States. Because of the Micro’s size and capabilities, it is very appropriate for facilities looking for affordable on-site power solutions.”
Interestingly, a few days ago the very first Micro 35 unit was taken into operation at Tecogen’s headquarters for training purposes. The CHP was unveiled in attendance of utility representatives, potential customers and expert engineers.
Strong Potential For TTcogen
In the past, Tecogen often received inquiries from potential clients who ended up not buying a CHP unit from the Company because its existing equipment didn’t have the appropriate size for the customer’s facility. Note that Tecogen manufactures CHPs with an output of between 60 kW and 100 kW. So both the smaller and larger units in TTcogen’s offering are all TEDOM machines.
For example, the customer, that ended up buying the initial TTcogen unit, had been approached by Tecogen in the past. It turned out, however, that the building was undersized to install a Tecogen CHP. Thanks to the expanded TEDOM offering, a perfect solution could be offered. This was basically a lost opportunity that was turned into a sale thanks to the JV.
Similar to TTcogen’s initial sale, the second order was also won thanks to Tecogen’s cooperation with TEDOM. The project engineer specifically requested a 50-60 kW synchronous generator CHP. In the past, that request would have eliminated Tecogen from consideration as its smaller CHP units use induction generators. However, now TTcogen could step in and compete for the project with the TEDOM synchronous generator portfolio.
In this case, a 55kW CHP unit will soon be installed at an elementary school in New Jersey. The TEDOM Micro T55 natural gas powered CHP unit will serve all of the school’s electrical and heating demand. This type of machine is particularly well suited for educational facilities with smaller energy requirements, as it has a compact equipment footprint, a long service life, and operates very quietly.
Maybe even more importantly, the school will save nearly $100,000 on the installation – a real win when considering the budget constraints of most schools. That is valuable budget money that can be re-directed toward the school’s core mission of education.
The JV between Tecogen and TEDOM is clearly a success. In both cases a lost opportunity for Tecogen was turned into a sale thanks to the TTcogen joint venture. We expect the JV to have a bright future.
The true beauty of this joint venture is that Tecogen in the past often got inquiries from potential clients who ended up not buying a CHP unit from Tecogen because its equipment was not an appropriate size for the customer’s facility. The building’s required load was either too big or too small for Tecogen’s equipment. Now, thanks to the much expanded offering, TTcogen is able to service those potential customers, quadrupling Tecogen’s addressable market for CHP.
With the initial unit being operational in the United States, we expect TTcogen to receive plenty more sales orders in the following months. This is obviously excellent news for Tecogen as it owns 50% of the JV. Buy recommendation.
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