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Combined Heat and Power

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Introduction

This page was written to support the establishment of state policies that encourage the deployment of combined heat and power (CHP) systems.  Below we briefly discuss CHP systems and enabling policies, and provide a list of annotated resources for further guidance.

ACEEE has written at length about CHP systems, which generate useful thermal energy and electricity or mechanical power in a single, integrated system. CHP systems are much more efficient than separate generation of thermal energy and electricity because heat that is normally wasted in conventional power generation is recovered to meet existing thermal demands. CHP systems range in size from tens of kilowatts for single buildings powered by biomass or fuel cells, up to hundreds of megawatts for large industrial or commercial facilities powered by natural gas (see national map).

Benefits of CHP accrue to both system owners and utilities. Benefits to owners include: lower overall energy costs, improved reliability and reduced thermal energy consumption.

Benefits to utilities and the electric system include: reduced system energy consumption and overall emissions, reduced demand and grid congestion, deferred or avoided investments in generation and distribution infrastructure, improved system reliability and diversity, and enhanced energy security.

ACEEE's 2010 State Energy Efficiency Scorecard outlines six factors that were considered in scoring states on the degree to which their policies encourage the deployment of CHP systems. Clicking on the links below takes the reader to sections in this paper that discuss each of these six factors in more detail. Annotated resources for even further guidance are also provided.

Other Resources

  1. ACEEE's CHP Web site.
  2. Brooks, S. et al. 2006. Combined Heat and Power: Connecting the Gap between Markets and Utility Interconnection and Tariff Practices, Part I. ACEEE Report #IE062. Washington, D.C.: American Council for an Energy-Efficient Economy. This report includes the results of a survey of utilities in fifteen states concerning their positions towards CHP.
  3. Chittum, A., Nate Kaufman, and Ben Foster. 2010. Local Technical Assistance for Deploying Combined Heat and Power (CHP) Projects: A Compendium of Resources. Fact Sheet. Washington, D.C.; American Council for an Energy-Efficient Economy.
  4. Chittum, A. and R. Neal Elliott. 2010. Combined Heat and Power and Clean Distributed Energy Policies. Policy Brief. Washington, D.C.: American Council for an Energy-Efficient Economy.
  5. [DOE] Department of Energy. 2010. Industrial Distributed Energy Web site. In addition to providing an overview of CHP technologies and benefits, this website includes information on current CHP projects by state and Clean Energy Regional Application Centers (RACs).  RACs provide region-specific market assessments, technical assistance, and education and outreach related to CHP and waste heat recovery technologies.
  6. Molina, M. et al. 2010. The 2010 Energy Efficiency Scorecard. Report #E107. Washington, D.C.: American Council for an Energy-Efficient Economy. This most recent edition of ACEEE's annual scorecard of state energy efficiency policies includes a section on CHP that outlines the scoring methodology and provides background on current best practices.
  7. Elliott, R.N. and M. Spurr. 1999. Combined Heat and Power: Capturing Wasted Energy. ACEEE Report IE983. Washington, D.C.: American Council for an Energy-Efficient Economy. This white paper provides an overview of CHP technologies and efficiencies, a short history of their use, regulatory and market barriers to expanded CHP use, and recommendations for overcoming these barriers.
  8. [EPA] Environmental Protection Agency. 2010. Combined Heat and Power Partnership Web site.
  9. [ORNL] Oak Ridge National Laboratory. 2008. Combined Heat and Power: Effective Energy Solutions for a Sustainable Future. Oak Ridge, Tenn.: Oak Ridge National Laboratory. This report makes a case for scaling up the use of CHP to 20% of US generating capacity by 2030.

State Policy Toolkit

View Local Policy Toolkit

Leading States

Texas: Helping to pioneer many of the regulatory policies that encourage CHP, and the state with the most installed CHP capacity in the country, Texas has also had an interconnection standard since 1999. The state has CHP-friendly standby rates, and its emissions regulations provide credit for CHP systems. CHP is also included as a key component of Texas' Energy Efficiency Goal. All of these favorable policies have enabled Texas to be a leader in CHP installation, despite limited financial incentives for CHP deployment.

 

Ohio: Ohio established an interconnection standard in 2007 that provides three size tiers of interconnection procedure based on system size, up to 20 MW.  In May 2008 the state enacted an Alternative Energy Resource Standard that includes CHP as a qualified technology. Ohio offers financial incentives for CHP installation, including property and corporate tax exemptions for waste heat recovery systems and Advanced Energy Program Grants through the Department of Development.