Restaurants
Restaurants spend about $5 billion on energy each year - with the median annual bill for electricity and natural gas amounting to roughly $161 per seat. Because electricity and gas costs eat up 1.5 percent of total restaurant sales, any energy-related savings can have a significant impact on the bottom line.1


A restaurant's profit is typically only 3% to 9% of total revenue. The money saved on operating costs adds directly to the bottom line, so saving 20% on energy operating costs through no-cost, low-cost and investment energy improvements can increase profit as much as one-third.2

CHP systems are available to serve smaller-sized facilities. In this type of facility, these smaller, 'modular' cogeneration units can generate anywhere from 20 kW to 650 kW, and produce hot water from engine waste heat. It is most common to install a system based on the hot water needs of the establishment. For facilities like restaurants, which require hot water year-round, cogeneration makes an economic and environmentally friendly option.

The table below lists restaurants in the U.S currently operating CHP systems. These installations generate a combined total capacity of just over 400 kW. The majority of these systems utilize reciprocating engines and natural gas. There are no restaurants currently utilizing CHP in the Gulf Coast region.3

Facility Name	Location	System Capacity (kW)
Jay's Catering	Garden Grove, CA	10 kW
My Place Restaurant	Gridley, CA	10 kW
Burger King Restaurant	Hollywood, CA	23 kW
Thermex Power Products Corp.	Monterey, CA	10 kW
Taco Bell	Oroville, CA	10 kW
Thermex Power Products Corp.	Salinas, CA	10 kW
Airport Club	Santa Rose, CA	60 kW
Yarp Restaurant Inc.	White Plains, NY	270 kW

According to the 2002 Economic Census, the Gulf Coast Region contains almost 36,000 full and limited-service restaurants.

	Full-Service Facilities	Limited-Service Facilities	Total # of Facilities
Louisiana	2,330	2,693	5,023
Oklahoma	2,233	2,468	4,701
Texas	12,113	13,985	26,098

In 2000, the technical potential of extended-service restaurants in the U.S was estimated to be about 3.4 GW. (The existing installed capacity at that time was estimated to be about 1 MW.) This estimate excluded fast food restaurants due to their inadequate thermal loads.4

In the Gulf Coast Region, the technical potential of extended-service restaurants was estimated to be about 400 MW. The table below provides the breakdown of this estimate by state.4

	Estimated CHP Potential (in MW)
Louisiana	53.7
Oklahoma	31.6
Texas	314.7
Region	400.0

In a report published in 2003, the American Gas Association indicated two main obstacles to installing CHP at these facilities:5

• Payback period too long - Paybacks of less than one year for capital investments are required, a standard followed throughout the restaurant industry. The up-front cost was a particular issue, related in part to maintenance concerns.
• Maintenance/capital cost concerns - Some companies provide bonuses to managers based on restaurant profitability. Expenditures on equipment maintenance directly reduce the base for bonuses, while capital expenditures for replacement equipment do not. Hence, equipment maintenance occurs infrequently and equipment is "run into the ground."