Combined Heat and Power

Standard power plants effectively use just 40 percent of the fuel they burn to produce electricity. Approximately sixty percent of the fuel used in the electric production process simply goes up the smokestack.

By using combined heat and power (CHP) we can integrate the production of usable heat and power (electricity), in one single, highly efficient process. Combined Heat and Power – also known as cogeneration – increases the efficiency of power plants.

CHP offers a significant  opportunity to reduce energy costs and to improve environmental performance.  CHP is not a technology of the future. CHP systems utilize proven technologies that are in use in many locations today. 

As an energy generation process, CHP is fuel neutral. This means that a CHP process can be applied to both renewable and fossil fuels.

CHP can be an economically beneficial energy solution for commercial, industrial, and institutional facilities with both electrical and thermal loads. It is a long-term investment that can provide significant energy cost savings and price stability.

CHP is one of the most common forms of energy recovery

The specific technologies employed, and the efficiencies they achieve will vary, but in every situation CHP offers the capability to make more efficient and effective use of valuable primary energy resources.

CHP provides a means to substantially reduce fuel, or ‘primary energy’, consumption without compromising the quality and reliability of the energy supply to consumers. Consequently it provides a cost-effective means of generating low-carbon or renewable energy.

As we move towards a lower-carbon future CHP also presents the opportunity to secure cost-effective reductions in CO2 emissions. The scale and cost of these savings will of course vary with respect to the scale, fuel and type of CHP plant, and in relation to the benchmark that is being used for comparison. But the proven potential is substantial.

Some of the benefits of CHP include

  • Energy-efficient.  The plant produces more energy per unit of fuel burned.
  • Economical. CHP can reduce a facility’s fuel and electricity costs.
  • Environmentally sound. CHP reduces the amount of fuel burned per unit of energy output, reducing the corresponding emission of pollutants and greenhouse gases. The less energy used, the less sulfur dioxide and carbon dioxide expelled into the environment.
  • Reliable. Staffed 24 hours a day by energy professionals, and with backup systems readily available, CHP plants can operate at extremely high rates of reliability.

 

Midwest States CHP Status and Additional Resources

Illinois

  • The state received a maximum score in the CHP chapter of ACEEE’s 2012 Scorecard
  • Between 2005 and 2010, Illinois installed nine new CHP systems with a combined capacity of 104.8 MW
  • Interest in CHP has decreased considerably since the spike in natural gas prices in 2002
  • ComEd, had a rate structure in place that provided acceptable economics for CHP projects.
  • In recent years, the structure changed, requiring CHP owners to operate longer hours and at reduced savings if they maintain full service form ComEd
  • Developers looking to invest in CHP were faced with
  1. longer running hours, which increased maintenance costs and operator costs, translating to decreased savings
  2. shorter operating hours, thereby reducing the overall savings opportunities
  • Recently, Illinois DCEO has offered grant incentives for biogas and biomass CHP projects

Stats

  • New CHP Sites (2005-2010): 9 sites (#11)
  • New CHP  Capacity (2005-2010): 104.8 MW (#4)
  • Average Capacity per Site (2005-2010) 11.6 MW
  • Total Primary Energy Consumption (2008): 4,089 trillion Btu (#4)
  • Average Gas Price (2009): $8.34 per MCF (#37)
  • Average Electricity Price (2010): 9.23cents per kWh (#23)

Indiana

  • Received three out of five points in the CHP chapter of ACEEE’s 2010 Scorecard
  • Eight new systems were installed between 2005 and 2010
  • With a combined capacity of only 2.2 MW
  • Indiana has not had any great advances in CHP policies because of economic reasons
  • Electricity is extremely inexpensive in Indiana, so an economically viable opportunity is hard to find
  • Indiana seems to lack awareness of the benefits and potential of CHP

Stats

  • New CHP Sites (2005-2010): 8 sites (#14)
  • New CHP Capacity (2005-2010): 2.2 MW (#36)
  • Average Capacity per Site (2005-2010): 0.3 MW
  • Total Primary Energy Consumption (2008): 2,857 trillion Btu (#11)
  • Average Gas Price (2009): $8.76 per MCF (#34)
  • Average Electricity Price (2010): 7.66 cents per kWh (#40)

Iowa

  • Received a score of two out of five in the CHP chapter of ACEEE’s 2010 Scorecard
  • Three new CHP systems were installed between 2005 and  2010
  • With a combined capacity of 16.9 MW
  • It’s hard to economically justify projects with high upfront costs and high payback periods
  • Iowa does not offer financial incentives to CHP systems to increase deployment

Stats

  • New CHP Sites (2005-2010): 3 sites (#26)
  • New CHP Capacity (2005-2010): 16.9 MW (#19)
  • Average Capacity per Site (2005-2010): 5.6 MW
  • Total Primary Energy Consumption (2008): 1,414 trillion Btu (#28)
  • Average Gas Price (2009): S7.88 per MCF (#39)
  • Average Electricity Price (2010): 7.77 cents per kWh (#37)

Kansas

  • Earned the lowest possible score in ACEEE’s Scorecard
  • Three new CHP projects between 2005 and 2010
  • Private industry is what makes CHP happen in Kansas
  • Ethanol industry made several CHP investments
  • Kansas has cheap natural gas, but still doesn’t create more projects
  • No incentives in the CHP market

Stats

  • New CHP Sites (2005-2010): 4 sites (#19)
  • New CHP Capacity (2005-2010): 16 MW (#21)
  • Average Capacity per Site (2005-2010): 4 MW
  • Total Primary Energy Consumption (2008): 1,136 trillion Btu (#30)
  • Average Gas Price (2009): $8.5 per MCF (#36)
  • Average Electricity Price (2010): 8.29 cents per kWh

Kentucky

  • Market not favorable
  • Earned zero points out of five in ACEEE’s scorecard
  • Has an abundance of cheap coal-powered electricity.
  • Wood products industry is the main industry that has found it economic to invest in CHP
  • No well “incentivized” to pursue CHP

Stats

  • New CHP Sites (2005-2010): 0 sites (#45)
  • New CHP Capacity (2005-2010): 0 MW (#45)
  • Average Capacity per Site (2005-2010): 0 MW
  • Total Primary Energy Consumption (2008): 1,983 trillion Btu (#18)
  • Average Gas Price (2009): $9.51 per MCF (#31)
  • Average Electricity Price (2010): 6.71 cents per kWH

Michigan

  • Earned two point out of five in ACEEE’s Scorecard
  • Three small CHP projects between 2005 and 2010
  • Higher-than-average electricity prices in Michigan
  • Little in programs and incentives for CHP
  • Interim goals starting in 2012, generating 10% of retail electric sales from renewable resources by 2015.

Stats

  • New CHP Sites (2005-2010): 4 sites (319)
  • New CHP Capacity (2005-2010): 3.2 MW (#33)
  • Average Capacity per Site (2005-2010): 0.8 MW
  • Total Primary Energy Consumption (2008): 2,918 trillion Btu (#10)
  • Average Gas Price (2009): $10.14 per MCF (#29)
  • Average Electricity Price (2010): 10.13 cents per kWh (#17)

Minnesota

  • Earned three out of five points in ACEEE’s Scorecard
  • Nine CHP projects between 2005 and 2010
  • Facilities in all sectors tend to have high heating loads due to the climate, which can lead itself well to CHP.
  • Utilities have played a role in encouraging greater energy efficiency
  • The Next Generation Energy Act of 2007, ser energy-saving goals for utilities of 1.5% per year. 
  • No specific incentives for CHP
  • Some CHP applications are eligible for renewable energy incentives and rebates
  • Fairly favorable market for CHP

Stats

  • New CHP Sites (2005-2010): 9 sites (#11)
  • New CHP Capacity (2005-2010): 12.2 MW (#23)
  • Average Capacity per Site (2005-2010): 1.4 MW
  • Total Primary Energy Consumption (2008): 1,979 trillion Btu (#19)
  • Average Gas Price (2009): $7.52 per MCF (#47)
  • Average Electricity Price (2010): 8.43 cents per kWh (#33)

Missouri

  • Earned two out of five points in the ACEEE’s Scorecard
  • With typical payback periods of 10 to 15 years, large CHP projects then rarely happen
  • No financial incentives available for CHP projects
  • Utilities major barrier to development
  • Dealing with utilities in the state is very difficult because of largely vertically-integrated electric utility structure, developers can’t simply take their business elsewhere.

Stats

  • New CHP Sites (2005-2010): 1 site (#43)
  • New CHP Capacity (2005-2010): 10.7 MW (#25)
  • Average Capacity per Site (2005-2010): 10.7 MW
  • Total Primary Energy Consumption (2008): 1,937 trillion Btu (#20)
  • Average Gas Price (2009): $11.03 per MCF (#23)
  • Average Electricity Price (2010): 7.95 cents per kWh (#35)

Nebraska

  • Received the lowest score in the CHP chapter of ACEEE’s Scorecard
  • Only state in the US where all electric utilities are publicly-owned
  • Some of the cheapest electricity prices in the country
  • Cause payback periods for CHP to be more extensive
  • No incentives

Stats

  • New CHP Sites (2005-2010): 2 sites (#34)
  • New CHP Capacity (2005-2010): 72 MW (#10)
  • Average Capacity per Site (2005-2010): 36 MW
  • Total Primary Energy Consumption (2008): 782 trillion Btu (#36)
  • Average Gas Price (2009): $7.65 per MCF (#44)
  • Average Electricity Price (2010): 7.6 cents per kWh (#41)

North Dakota

  • Earned one point out of five in ACEEE’s Scorecard
  • Has very cheap energy and substantial coal reserves
  • Produce most electricity in-state from coal at very low prices
  • No incentives
  • Coal, recycled energy, and biomass appear to be the available opportunities for CHP developers in North Dakota

Stats

  • New CHP Sites (2005-2010): 4 sites (#19)
  • New CHP Capacity (2005-2010): 23 MW (#15)
  • Average Capacity per Site (2005-2010): 5.8 MW
  • Total Primary Energy Consumption (2008): 441 trillion Btu (#43)
  • Average Gas Price (2009): $7.02 per MCF (#50)
  • Average Electricity Price (2009): 7.02 per kWh (#47)

Ohio

  • “good on paper” but in practice, developers find it to be a fairly unfavorable market
  • Earned all five points in ACEEE’s 2010 Scorecard
  • Excess paperwork and “red tape” were cited generally as barriers in Ohio.
  • Ohio’s large industrial base presents one  of the largest potential markets for CHP in the Midwest
  • Lack of incentives

Stats

  • New CHP Sites (2005-2010): 8 sites (#14)
  • New CHP Capacity (2005-2010): 94.6 MW (#7)
  • Average Capacity per Site (2005-2010): 11.8 MW
  • Total Primary Energy Consumption (2008): 3,987 trillion Btu (#6)
  • Average Gas Price (2009): $10.26 per MCF (#28)
  • Average Electricity Price (2010): 9.15 cents per kWh (#24)

South Dakota

  • CHP market is somewhat favorable
  • Earned three out of five in ACEEE’s Scorecard
  • Biggest CHP opportunity in South Dakota has been found in the compressor stations on the state’s myriad natural gas pipelines.
  • Utilities in South Dakota don’t appear to actively work against new CHP installations
  • Some appear to be very interested

Stats

  • New CHP Sites (2005-2010): 4 sites (#19)
  • New CHP Capacity (2005-2010): 21.5 MW (#16)
  • Average Capacity per Site (2005-2010): 5.4 MW
  • Total Primary Energy Consumption (2008): 350 trillion Btu (#45)
  • Average Gas Price (2009): $7.54 per MCF (#45)
  • Average Electricity Price (2010): 7.76 cents per kWh (#39)

Wisconsin

  • Relatively favorable
  • Earned four out of five in ACEEE’s Scorecard
  • Has the highest electricity rates in the Midwest region
  • Has an abundance of coal power and nuclear power
  • No shortage of power and reliability is not an issue
  • Industry is currently seeking a two-year payback, or three at the most. 
  • No incentives, but are incentives for renewable nergy
  • Alliant Energy has established a shared savings program for certain CHP systems

Stats

  • New CHP Sites (2205-2010): 20 sites (#6)
  • New CHP Capacity (2005-2010): 83 MW (#8)
  • Average Capacity per Site (2005-2010): 4.2 MW
  • Total Primary Energy Consumption (2008): 1,862 trillion Btu (#21)
  • Average Gas Price (2009): $9.41 per MCF (#32)
  • Average Electricity Price (2010): 9.75 cents per kWh (#20)

Source: ACEEE

 

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