Advanced Energy Strategy Pays Off for Historic Lafayette Hotel

Chuck Colgan's picture

When Old Buildings Go High Tech                          

Originally published in the San Diego Business Journal March edition of “Sustainable San Diego”

Built in 1946 in a grand old Hollywood style, San Diego’s Lafayette Hotel was once a retreat for Southern California’s rich and famous from Bob Hope and Ava Gardner to Tarzan actor Johnny Weissmuller. By 2010, the historic landmark was in need of extensive remodeling and a creative approach was necessary in order to comply with historic preservation guidelines and incorporate sustainability.

“A big part of the renovation was looking at how we could incorporate sustainable business practices as that was a key component to the overall project financing,” said Jay Wentz, managing partner of Hampstead Lafayette LLC, owners of the hotel. “We wanted to combine the Hollywood history embodied in this hotel from the forties and fifties with a present day urban chic, boutique feel.”

When Hampstead Lafayette decided to incorporate sustainable energy into the hotel’s $6 million 2011 renovation, they chose an innovative fuel cell technology for reducing energy costs and lessening the facility’s environmental impact. Housed in the hotel’s basement, the energy system does not affect the building’s exterior appearance and complies with historic preservation guidelines.

Savings at the Lafayette today

The 40-kilowatt stationary fuel cell system manufactured by ClearEdge Power generates much of the hotel’s electrical needs and supplies heat for its large outdoor swimming pool. This simultaneous production of electrical and thermal energy from a single source is known as combined heat and power (CHP). CHP can be configured with fuel cells or alternative on-site generation technologies such as a microturbine or internal combustion engine. The dual benefit of generating both heat and power makes CHP systems more cost effective, with a better return on investment and a more efficient use of natural resources.

Nearly three years later, the Lafayette Hotel is saving more than 45 percent on its annual electrical bills with a 40 percent reduction in its carbon footprint. The cost of the fuel cell CHP system was offset by $100,000 through the California Self-Generation Incentive Program (SGIP), administered by CSE in the SDG&E territory, and was eligible for a 30% federal tax credit, allowing for an anticipated payback of only 5.8 years for the CHP investment. “The SGIP rebate was essential in allowing our hotel to implement fuel cell technology,” Wentz said.

What is stationary fuel cell technology?

A fuel cell is an electrochemical energy conversion device that captures the power of hydrogen to produce clean electricity and heat. The hydrogen used to power the fuel cell may come from a variety of sources, including natural gas, waste gas or biogas. The term stationary fuel cell differentiates them from portable fuel cells used in cars, forklifts and other applications.

Individual fuel cells produce relatively small amounts of electricity so they are stacked, or placed in series, to increase output. For properties such as the Lafayette Hotel where aesthetic considerations and spatial constraints played a large role in determining the appropriate energy generation technology, fuel cells can be an excellent choice due to their relatively small footprint and scalability.

According to Jeremy Del Real, CSE senior energy engineer, CHP works well with coincident and continuous thermal and electric loads, both of which are inherent to hospitality facilities. “CHP offers the hospitality industry a method to enhance power reliability, reduce electric and thermal operating costs, and promote a green image,” he said.

California leading the way

Nationwide, fuel cell use is growing for industrial applications and university microgrids and as a reliable power source for businesses that cannot afford to experience power outages, such as telecommunication firms, medical facilities and grocery stores. Fuel cells are capable of generating power 24/7, even when the power grid goes down.

Self-generating fuel cell systems are operating in the San Diego region at companies such as Cox Communications, Albertsons and Sheraton San Diego Hotel & Marina and at much larger facilities such as UC San Diego and Camp Pendleton. At the Sheraton, Fuel Cell Energy has installed two fuel cell systems that generate 1.5 megawatts on-site. The fuel cells are quiet enough to be located next to the hotel’s guest facilities and supply electricity for the 1,044-room hotel and heat to warm the hotel's pool.

California continues to lead the way in supporting both fuel cell and CHP technologies by providing financial and regulatory support. In San Diego, CSE has provided nearly $44 million in SGIP funding for eligible CHP projects since the program’s inception in 2001, with $7 million devoted specifically to fuel cell CHP projects like those at the Lafayette Hotel and Sheraton San Diego.

CSE also represents the U.S. Department of Energy (DOE) as the Pacific Combined Heat and Power Technical Assistance Partnership (Pacific CHP TAP) that offers a number of federally funded engineering services for potential CHP projects in California including hotels, hospitals and critical infrastructure facilities.

Which technology is right for you?

“The first step in determining if CHP technologies are a good fit for a facility is to perform a qualification screening” said Del Real. “The results of this first-cut analysis determine if a more detailed analysis should be pursued and the evaluation of a CHP system at a customer’s facility should be continued.”

There is a wide range of self-generation technologies, and the one that is right for a business depends on the unique load profile and energy objectives.

CSE provides technical and financial assistance to San Diego area businesses interested in wind, waste energy recovery, pressure reduction turbines, advanced energy storage and combined heat and power systems. Through the SGIP, CSE offers substantial cash incentives that can range up to hundreds of thousands of dollars or more. In addition, CSE assists business and facilities determine if CHP is right for them through the Pacific CHP TAP.

For more information

To discover which technology is right for your facility, you can take an online clean energy assessment and check out details about the DOE Pacific CHP TAP. For further information, contact CSE project managers Gene Kogan (CHP) at (858) 633-8561 or Rebecca Feuerlicht (SGIP) at (858) 634-4737.

Chuck Colgan