Older US Cities Face District Energy, CHP Roadblocks; Canada Forges Ahead

by | Oct 18, 2012

Older cities face significant obstacles in installing district energy and combined heat and power systems, according to a new report. Meanwhile Vancouver, BC moves forward with its plans to expand district heating.

New Energy for Older Cities: District Energy, Combined Heat and Power, and the Northeast-Midwest Region’s Older Industrial Cities, a report by the Northeast/Midwest Institute, says district energy and CHP can deliver cost savings, a reliable energy supply and environmental benefits to older industrial cities. But roadblocks are widespread.

These include utility barriers such as a dearth of shared standards for interconnection and a low return on the sale of excess electricity to the grid. Additionally, initial capital costs are high and federal and state financing programs and incentives are lacking. The report says there’s also a general lack of awareness as to the energy-saving and economic benefits of district energy and CHP.

The report includes a case study from Cleveland, Ohio’s Medical Center Company (MCCo), a nonprofit district energy provider. MCCo uses coal and natural gas to generate steam heat and chilled water for nine member organizations, including Case Western Reserve University and Case Medical Center. In 2010, it decided to become coal-free. In the coming years the nonprofit will add a CHP system to its existing central steam plant. It expects the cogeneration system will increase fuel efficiency to about 70 percent, cut energy use about 28 percent and reduce carbon emissions 49 percent.

However, policy and financial obstacles — it needs to finance a $100 million CHP facility without affecting member institutions’ balance sheets — hinder MCCo’s progress toward adopting CHP. State-level incentives aren’t relevant to tax-exempt nonprofits like MCCo, and its electricity provider, Cleveland Public Power, does not offer any rebates.

Vancouver, however, is making progress in its plans to create centralized heat delivery systems, the Vancouver Sun reports.

As part of the city’s goal to reduce greenhouse gas emissions by 120,000 ton per year by 2020, officials want to adapt the existing steam heat plants at Vancouver General Hospital and Shaughnessy Hospital (as opposed to building new district heat systems) to support residential development on the densely populated Broadway and Cambie corridors.

Some 120 Canadian cities have direct energy systems, the newspaper reports. The city of North Vancouver, for example, has more than 1,000 residential customers, plus commercial and civic facilities, for its $8 million Lonsdale Energy Corporation system.

Also, the paper reports, Prince George, BC is investing $14.4 million in a biomass district system.

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