Combined Heat and Power Backgrounder

by | Oct 12, 2012

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, the Energy Information Administration reports. 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.

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.

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.

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.

In the industrial sector, 70% of fuel consumption (primary energy input) at CHPs was used to produce UTO (on an energy basis, averaged over the 2004-2011 period), and in the commercial sector, 65%. In the electric power sector, only 28% of CHP fuel consumption is used for UTO production. Between 2004 and 2011, 6.5% of total fuel consumption reported to EIA was used to produce UTO.

CHP facilities, particularly those at industrial sites, were disproportionately hard hit by the recent economic recession. While electricity generation at non-CHP plants increased 4.8% between 2004 and 2011, electricity generation at CHP plants decreased by 11.2% over this same period.

The technology choice for a CHP facility depends on available fuel and the amount of generating capacity needed. Reciprocating internal combustion engines are widely used in small-to-medium applications (under 10 MW). Larger systems use industrial boilers, simple-cycle steam turbines, and gas turbines, as well as combined-cycle systems that are similar in design to combined-cycle units used in power production.

UTO produced by CHP plants is typically in the form of steam and is used in a variety of ways. Some industrial processes use heat, hot water, or steam directly. Other installations use UTO to create chilled air or water using an absorption chiller, or dehumidify air using a desiccant dehumidifier. A typical use in a commercial installation is space heating.

Twenty-three states recognize CHP in one form or another as part of their Renewable Portfolio Standards or Energy Efficiency Resource Standards. A number of states, including California, New York, Massachusetts, New Jersey, and North Carolina, have initiated specific incentive programs for CHP.

This article is taken from “Today in Energy,” a series of articles from The US Energy Information Administration.

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