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Research Report

Coal Retirements and the CHP Investment Opportunity

September 19, 2012
Energy Efficiency Research
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The next two decades will see substantial changes in the way electricity is generated in the United States. As coal loses favor to natural gas and other alternatives, utilities will retire a significant portion of their coal fleet and invest substantially in other energy resources around the country. Energy efficiency, and combined heat and power (CHP) in particular, represents significant near-term opportunities to make highly cost-effective investments in new energy resources that can more cleanly and efficiently meet the nation’s demand for electricity.

This report targets 12 U.S. states and ascertains the likely amount of coal-fired electric capacity to be retired in the near term plus the potential for CHP to meet some of that lost capacity. It finds that, while CHP is not positioned to fully replace the lost capacity, it can play a substantial role in meeting these needs. Two of the states targeted could replace 100 percent of their lost capacity, and two others could replace over half. This report also finds, however, that most of the states that are facing higher levels of coal retirement do not have most of the critical policies in place that yield a healthy investment environment for CHP.

This report also analyzes the impact that substantial investment by utilities would have on the CHP market. Utilities are able to take a longer view on investments in capital expenditures and are thus able to accept longer payback periods than a typical industrial or commercial entity. It finds that investment by utilities would substantially boost the amount of CHP deployed in the 12 target states, but that all of those states lack the policies and regulations that would encourage utilities to make such investments. 

Research Report

Coal Retirements and the CHP Investment Opportunity

This Article Was About

Industrial Programs CHP

Authors

Anna Chittum
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