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Thursday, July 17, 2014

HARC assesses obstacles to more combined heat and power systems and industrial energy efficiency

2011 CHP Generator Report

Hospitals and universities turning more to combined heat and power technology

Hospitals critically require a constant, 24/7 supply of electricity and hot water, uninterrupted by events like tropical storms.

To assure such continuity in Houston’s Texas Medical Center, the world’s largest collection of hospitals and other medical and health facilities, the Thermal Energy Corporation (TECO) turned to an energy-saving, pollution-reducing technology called combined heat and power – also commonly known as CHP and cogeneration.

TECO’s $377-million system, completed in 2011, uses natural gas for the simultaneous production of electric power, steam and chilled water to serve 18 of 52 institutions in the sprawling Medical Center.

A glance at a U.S. Department of Energy map of major CHP capacity across the country reveals an even more significant factor behind Texas’ No. 1 ranking for use of cogeneration technology – a cluster of major cogeneration facilities along the Gulf Coast represents its widespread adoption by many oil refineries and chemical plants.

Even though it is leading the nation in CHP power production, Texas still has ample opportunities for broader introduction of CHP and for major industries’ greater adoption of other energy-efficiency measures.

"The most promising openings for further introduction of CHP in the state continue to be along the ship channel, as well as hospitals and university campuses."

--Gavin Dillingham, Research Scientist, Clean Energy Policy

HARC, partnering with the State Energy Conservation Office, recently began a two-year study to identify regulatory and policy barriers that may be keeping that from happening. The project also involves work with major stakeholders to develop an action plan identifying the best ways to overcome the barriers that exist.

Texas’ CHP installations to date are largely associated with the refining and petrochemical industries – 13 gigawatts of the state’s 17 gigawatts of installed CHP electricity capacity are produced by systems along the industry-bordered Houston Ship Channel, said Gavin Dillingham, a HARC research scientist focusing on clean energy policy.

The most promising openings for further introduction of CHP in the state continue to be along the ship channel, as well as hospitals and university campuses, Dillingham said.

We see huge opportunities coming into play at hospitals and company campuses,” he said, noting that many colleges and universities already use CHP on their campuses.

“The most important models are at campuses and hospitals,” he added. “Everything else at a smaller scale continues to face significant economic and technical barriers.”

The nonpartisan Center for Climate and Energy Solutions, which partners with leading corporations, notes that cogeneration systems “appeal to business operations requiring a continuous supply of reliable power such as data centers, hospitals, universities, and industrial operations.”

The Center lists these items in its description of CHP’s major benefits:

  • Decreasing total fuel consumption, greenhouse-gas emissions and other air pollutants such as sulfur dioxide, nitrogen oxides and mercury.
  • Generating power onsite, so it is “resilient in the face of grid outages thus providing power for critical services in emergencies and avoiding economic losses.”
  • “Avoiding or deferring investments in new electricity transmission and distribution infrastructure and relieving congestion constraints on existing infrastructure.”

Even offering such advantages, there are obstacles to the broader introduction of CHP, as well as other industrial energy-efficiency practices, which HARC researchers will be examining.

One focus of the project’s discussions with industry stakeholders involves a key question, why are companies in many cases not taking advantage of [combined heat and power systems]?

--Jennifer Ronk, Program Director, Environmental Science and Energy Efficiency

Jennifer Ronk, HARC’s program director for environmental science and energy efficiency, said one focus of the project’s discussions with industry stakeholders involves a key question – given the “huge opportunities” she sees for greater energy efficiency at major industrial plants, why are companies in many cases not taking advantage of them?

“Some of it may be institutional resistance to change – electricity is just something they pay for,” Ronk said. “We hope education and awareness around those issues will help. Companies know how to do audits and implement changes. We need to make the case that those changes make sense.”

Some barriers to wider adoption of CHP combine technological and economic factors, Dillingham added.

In certain cases, smaller facilities discover it is challenging to find appropriate technologies, which are also economically viable, to use the waste heat that CHP systems produce, he said. Large facilities, such as oil refineries, find it relatively easier, because they include integral processes that can utilize that heat.

“One of the other barriers we’re working with is the time it takes for interconnection [of a CHP system to the electric grid], Dillingham added.

Particularly for larger projects, such interconnection work can take up to 1,000 days, adding to the difficulties faced in meeting various interim deadlines to finish a project on time, he said.

Policy changes at the state and federal level in recent years may offer a push for more adoption of CHP and other industrial energy-efficiency projects:

  • In 2012, President Obama issued an executive order calling for an additional 40 gigawatts of industrial CHP by 2020. Dillingham noted, however, that most of the federal effort to back up that order so far has involved technical assistance, but no new financing aid.
  • The Texas Legislature in 2013 passed a new law, HB 2049, which allows sale of excess power from a CHP system to its owner’s adjoining customers if they are already purchasing steam or heat. This can increase the economic viability for construction of a new CHP system, Dillingham said.
  • The Obama administration recently proposed new federal regulations to lower existing power plants’ greenhouse-gas emissions by an average of 30 percent per state (39 percent in Texas). The HARC project will assess these regulations’ possible encouragement of more use of CHP, but the likeliest response in Texas may be the replacement of retiring coal-fired power plants with lower-emission natural gas plants, Dillingham said.