Combined Heat, Power Technology Fills Important Energy Niche

Editor’s Note: EarthTechling is proud to repost this article courtesy of the U.S. Energy Information Administration.

Combined heat and power (CHP), also called cogeneration, is an efficient approach to generating electric power and useful thermal energy for heating or cooling from a single fuel source. Instead of purchasing electricity from the grid and producing heat in an on-site furnace or boiler, a CHP generator provides both energy services in one energy-efficient step.

At the end of 2011, there were nearly 70 gigawatts (GW) of combined heat and power (CHP) generating capacity spread across the United States, accounting for almost 7% of total U.S. capacity, with 25 GW in the industrial sector, 2 GW in the commercial sector, and 43 GW in the electric power sector. In 2011, the average capacity factor for generators at industrial CHP plants was 57%, the equivalent of running at full capacity 57% of the time.

graph of combined heat and power map

Source: U.S. Energy Information Administration, Annual Electric Generator Report (Form EIA-860).
Note: Click to enlarge.

CHP facilities tend to be built in conjunction with certain industries that have heat or steam demands. For example, the map above shows a concentration of CHP units along the Gulf Coast, where many cogeneration plants are located near refineries and chemical plants. A number of smaller installations are located near pulp and paper mills in the South, in northern Wisconsin, and in Maine, burning the wood waste byproducts as fuel. CHP installations are also common in states with a history of utility regulation that is favorable toward CHP, such as California and New York.

CHP technology takes advantage of the waste heat from electricity production to provide both electricity and useful thermal energy from a single energy source. CHP can be more efficient and cost-effective than providing heat and electricity separately, which would typically require more fuel use.

CHP capacity additions followed the pattern of the electric power industry (for more information, see previous articles on capacity, primarily natural gas), peaking in the early 2000s, building an average of more than 2,960 megawatts (MW) per year for the 2000-2005 period. CHP capacity additions slowed in the 2006-2011 period (as did most non-CHP capacity additions), averaging less than 500 MW of new CHP capacity per year.

In 2012 (through the end of August), six CHP generators have come online, totaling 209 MW. New generators proposed for 2013-2016 include more than 3,700 MW of CHP. In general, CHP growth can be slowed by institutional barriers, such as an unfavorable regulatory environment, or by risk factors in cost-benefit analysis, such as the additional capital expense of a CHP unit.

Combined heat and power capacity by sector

CHP plants can be found in three sectors: the electric power sector (plants whose primary purpose is to produce electricity for public sale); and the industrial and commercial sectors (where the CHP facility is usually intended to provide electricity and steam to the host facility, such as a factory). More than 85% of all generating capacity sited at industrial and commercial facilities uses CHP technology.

Industrial applications with constant thermal and electricity demands are ideal candidates for CHP. In the industrial sector, CHP is most likely to be found in energy-intensive manufacturing, especially those that generate combustible byproducts. The majority of industrial CHP capacity can be found in the chemicals, petroleum refining, and paper industries. The food and primary metals industries contain much of the remaining CHP. In the commercial sector, CHP is often used for building or campus heating and air conditioning, such as at college campuses and hospitals.

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