Generating Two Forms of Energy in One

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Study: Combined Heat and Power Has Potential to More Than Double Its U.S. Capacity

Pop quiz: During and after Hurricane Sandy, which generation technology stepped up to help hospitals, schools, residential buildings, and a water treatment plant continue operations?

Answer: Combined heat and power (CHP), a type of distributed generation that combusts various fuels to produce heat and electricity for local consumption, saving energy costs. In traditional fossil-powered electricity generation, much of the heat is wasted.

EPRI’s market assessment of CHP found that the United States has 4,400 such facilities, with 83 gigawatts or 8% of total power generation capacity. About 86% of that serves the industrial sector, particularly chemical manufacturing, paper processing, petroleum refining, food processing, and metals manufacturing. Most are natural gas–fueled and use engines or turbines to produce electricity. An analysis of industrial and commercial CHP applications and sites in the U.S. shows that an estimated 126 gigawatts of additional CHP capacity might be feasible in the near term, resulting in significant efficiency improvement, reduced fuel costs, and reduced emissions.

Large commercial facilities such as hospitals typically purchase natural gas for boiler heating systems and grid electricity for other uses. According to EPRI calculations for a hypothetical site, installing a 1,100-kilowatt CHP facility to meet those combined needs would reduce energy costs by 33% and CO2 emissions by 55%.

Factors driving adoption include providing power during outages (often as part of new microgrid configurations), along with its higher efficiency and lower greenhouse gas emissions relative to grid electricity. CHP systems can also be integrated with demand response programs that offer incentives to reduce electricity use during high demand periods.

Artwork by Kirk Anderson