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Obama Calls for 50 Percent Increase in Combined Heat and Power by 2020

Friday, August 31, 2012

By Ari Natter  

WASHINGTON, D.C.--An executive order signed by President Obama Aug. 30 calls for increasing the use of combined heat and power 50 percent by 2020, shining a spotlight on a “forgotten” energy resource that involves using heat produced during electricity generation and other industrial processes.

In addition to establishing a national goal of deploying 40 more gigawatts of combined heat and power from industrial sources in less than a decade, the executive order requires federal agencies to coordinate with other parties to identify and encourage best practice policies for industrial energy efficiency and combined heat and power (CHP).

The document, which noted that the industrial sector accounts for 30 percent of all energy consumed in the United States, also ordered the use of existing federal programs to support and accelerate investment in industrial efficiency and CHP.

“While our manufacturing facilities have made progress becoming more energy efficient over the past several decades, there is an opportunity to accelerate and expand these efforts with investments to reduce energy use through more efficient manufacturing processes and facilities and the expanded use of combined heat and power,” the order said.

CHP, also known as cogeneration, involves producing heat during electricity generation and using it to warm buildings or to generate additional electricity. Currently, the United States has 82 gigawatts of installed CHP capacity, according to the Energy Department.

Wasted Steam, Policy Barriers.

CHP, along with waste energy recovery, a form of CHP that reuses energy from sources such as exhaust heat or gas from industrial processes, currently supplies about 12 percent of U.S. energy capacity, according to the U.S. Clean Heat & Power Association.

While that figure represents more electricity than is generated by wind, solar, geothermal, and biomass combined, the United States is lagging behind other countries in the development of CHP, Dick Munson, senior vice president of Recycled Energy Development, LLC, said during a July 31 energy forum.

“At the moment we have enormous amounts of waste energy that are just being vented into the atmosphere,” Munson said at the forum, held by the Business Council for Sustainable Energy and the Alliance to Save Energy. “You can drive by any power plant or large factory and you're going to see plumes of steam that are waste.”

According to Munson, the efficiency of the United States's electricity-generating facilities has been at the same level since President Eisenhower was in office in the 1950s--an “abysmal” 33 percent.

'Forgotten' Source of Energy.

“Over the past 100 years we have focused on electricity and forgotten about steam and heat,” Munson said. “And we have created a series of policy barriers to enhanced supply side efficiency.”

Among those barriers are low utility acceptance of CHP and high interrconnection fees, or fees charged to connect to the electricity grid, Jessica Bridges, executive director of the U.S. Clean Heat & Power Association, said in an interview.

Compared to countries like Denmark, which obtains over 50 percent of its energy from combined heat and power, the United States is “very behind,” Bridges said.

According to an August report released by the Energy Department and Environmental Protection Agency, achieving the goal laid out in the executive order of adding 40 gigawatts of CHP would save energy users $10 billion a year compared to current energy use, reduce emissions by 150 million metric tons of carbon dioxide annually, and reduce energy use by 1 quadrillion Btus, the equivalent of 1 percent of all energy use in the United States.

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