The U.S. Department of Energy's decision to support combined heat and power initiatives has provided tools that industry advocates were not expecting in their work to educate prospective users on the complex process of installing the technology.
The DOE on Nov. 28 announced plans to spend $25 million on eight technical assistance partnerships for combined heat and power, or CHP. The funding recipients, made up of universities and nonprofits, are tasked with educating and engaging entities that could make use of CHP technologies. According to the Energy Department, CHP is a suite of technologies that use a variety of fuels to generate power and at the same time recover heat normally lost in the power generation process to provide heating or cooling, which increases the efficiency of the generator.
The department has supported these types of efforts in the past. Seven DOE-funded CHP partnerships provide outreach, technical and policymaker education services. Since 2009, technical assistance partnerships have given support to more than 1,900 projects.
But the DOE announcement came at a time that had appeared to be unfavorable for CHP efforts, said Richard Murphy, the American Gas Association's, or AGA's, managing director of sustainable growth. Planned budget cuts under the Trump administration targeted the CHP technical assistance partnership programs, threatening to scale it back or eliminate it altogether, Murphy said in a Nov. 30 interview.
"We were really concerned. All indications [suggested] this was going to be eliminated," Murphy said. He noted that the AGA and other stakeholder groups had asked the DOE to keep the program, with an eye to environmental benefits, potential cost savings and a growing market for natural gas.
"The fact that DOE changed their course on that — from something that was really targeted for elimination to now, through this notice, demonstrating their commitment to this program — was really well received," Murphy said.
CHP represents about 82 GW, or 8%, of U.S. generating capacity and 12% of actually annual generation, according to the AGA. Murphy said roughly 72% of that 82 GW is served by natural gas, accounting for about 4.5 Tcf of gas use.
Broadly speaking, non-CHP facilities that could make use of the technology would be able to use more than double the existing installed capacity, Murphy said. More than an additional 100 GW of technical potential is out there, he said.
"There is a tremendous amount of what is referred to as 'technical potential,'" Murphy said of the opportunity to expand CHP use. "All of those types of manufacturing facilities, hospitals, universities that have a need for thermal energy ... can use CHP to supply thermal energy while providing electricity."
The practicality of installing CHP in any given location depends heavily on regional and site-specific characteristics. Ideally, CHP users save money, cutting down on power lost in transmission across long distances and decreasing their need for stand-alone heating. However, the cost of building and maintaining onsite CHP may or may not outweigh the savings, depending on the price difference between power and natural gas. An individual facility's configuration and overall demand may also make the cost of installing CHP technology prohibitive.
The eight CHP technical assistance partnerships are intended to help prospective users navigate these complexities.
"CHP is very much a local [issue]," Murphy said. "The economics depend upon the local characteristics. That's one of the challenges ... It's almost a unique solution for every customer."
State policies can also impact CHP's viability, and regulatory environments vary widely across states, according to a 2017 report from the American Council for an Energy-Efficient Economy. The council ranked states based on their interconnection standards for hooking CHP systems up to the grid, policy encouragement, deployment incentives and any additional relevant policies. California, Maryland, Massachusetts and Rhode Island got perfect scores, while eight states and territories received zero points.
The report highlighted Rhode Island's rise through the ranks in 2017 as a result of more deliberate work on CHP-related energy savings and goal setting. The top-ranking states, along with Maine, Illinois and New York, all had state-approved production goals for CHP generation, which the report said was a "strong policy driver for encouraging utilities and program administrators to acquire generation from CHP."
Some regions, particularly those prone to storms, have seen resilience as a reason to install CHP, Murphy said. On-site power generation can mitigate the impacts of grid damage in the wake of a storm. The DOE cited this benefit as one of the reasons for supporting the CHP programs.
