New ACEEE Report Examines CHP Value

A new report released July 18 by the American Council for an Energy-Efficient Economy is designed to help utilities, policymakers, regulators, and end-users better appreciate and understand the immense value Combined Heat and Power (CHP) can offer to an energy system. “Utilities and the CHP Value Proposition” by Anna Chittum and Kate Farley describes the myriad benefits of CHP and the manner in which utilities are currently valuing them. After cataloging the benefits of the various forms of CHP the authors examine the real world in which CHP is valued and developed in practice today, including revenue streams to host sites and utilities as well as society at large, business and regulatory structures. Even though the technical potential for CHP at existing facilities is some 130 gigawatts according to the Department of Energy, which is about 1/3 of the nation's coal-fired generation capacity or about the combined total generation of California and Florida, they found that growth of this highly efficient technology has been anemic. The reasons, they determine, are due to utilities’ business and regulatory structures that tend to discourage investments in CHP and encourage them instead to pursue investments in other types of assets, such as new centralized generation resources or distribution infrastructure. Additionally, utilities’ investment decisions are tied to cost-benefit analyses that usually ignore or deeply discount CHP’s system-wide benefits. The authors conclude with suggestions for policymakers and utilities to better integrate CHP into utility operations. This research should help regulators and policymakers understand how increased CHP deployment – hastened by utilities – could offer all system users cleaner, cheaper, and more reliable power. By better valuing the many benefits of this technology and working with utilities to address their disincentives to pursuing it, policymakers and regulators could help everyone better enjoy the tremendous economic and environmental benefits of CHP. Download a copy of the full report here .

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New ACEEE Report Examines CHP Value

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