The Continued Relevance of Combined Heat and Power (CHP) in the Clean Energy Transition

Seven years ago homes, businesses and factories in New York, on Long Island and across large parts of New Jersey were without power, hot water and heat. A handful of sites, including New York University (NYU), the Long Island Home (Amityville, NY), and the Breevort (New York City) continued to provide electricity to employees, students, patients, customers and residents. They had invested in combined heat and power (CHP) systems capable of delivering high efficiency, environmentally superior and resilient power and heat at their facilities. The U.S. Department of Energy publication “Combined Heat and Power: Enabling Resilient Energy Infrastructure for Critical Facilities” March 2013, includes 14 case studies of CHP facilities that ran through Superstorm Sandy and other storms and blackout events in other regions of the country.

The U.S. Department of Energy provides the following definition at their Combined Heat & Power eCatalog site:
Combined heat and power (CHP), also known as cogeneration, produces both electricity and thermal energy on-site, replacing or supplementing electricity provided from a local utility and fuel burned in an on-site boiler or furnace. CHP systems can be designed to operate independently from the electric grid providing reliable power and thermal energy to keep critical facilities running during grid outages.

Most of the existing CHP systems utilize natural gas. CHP systems that operate for a large portion of the year and perform at a high total system efficiency yield social benefits in the form of reduced air emissions, lower greenhouse gases, greater levels of energy efficiency when compared with separately provided power, heating and cooling systems.

Well designed and operated CHP systems represent a smart way to use natural gas in an efficient, environmentally responsible manner to meet the energy needs of businesses, factories, healthcare and university complexes and multifamily and mixed use campuses. As states, metro areas and cities transition to a carbon free energy future, CHP technologies should play an important role in a clean energy roadmap.

In recognition of social benefits, renewable energy and energy efficiency technologies are often rewarded with state incentives, favorable utility regulatory treatment and federal and state tax preferences. CHP systems provide many of the same benefits as renewable and efficiency technologies that qualify for preferential state and federal treatment. Yet the same societal benefits provided by CHP are either not rewarded at all, or not in a manner that’s nearly commensurate with qualifying renewable and efficiency technologies.

Smartly designed CHP systems remain an invaluable component in building an effective bridge from our existing energy structure to the energy ecosystem of the next generation. Smartly designed policies are best when fashioned to be technology neutral and awarded on the basis of demonstrated, measured outcomes that society desires.

Author: Tom Bourgeois, Deputy Director of the Pace Energy & Climate Center and Director of the U.S. Department of Energy’s New York / New Jersey Combined Heat and Power, Technical Assistance Partnership. He is primary or contributing author of numerous reports, briefs, presentations on the topic of combined heat and power. Mr. Bourgeois was a co-author of Combined Heat and Power: Enabling Resilient Energy Infrastructure for Critical Facilities. Prepared for Oak Ridge National Labs, ORNL/TM-2013/100. March 2013.