ORNL’s Report on CHP and Sustainable Energy
In December 2008, Oak Ridge National Laboratory (ORNL) published the report "Combined Heat and Power: Effective Energy Solutions for a Sustainable Future" (www.chpcentermw.org/pdfs/ORNL_Report_Dec2008.pdf), which highlights the sharpened focus on using CHP to deal with environmental and business challenges in the U.S.
CHP is one of the most promising options in the U.S. energy efficiency portfolio, according to the authors of the ORNL report. It can provide reliable electricity, mechanical power, or thermal energy at a factory, university campus, hospital, or commercial building — wherever the power is needed.
Because it captures and utilizes waste heat, CHP requires less fuel than equivalent separate heat and power systems to produce the same amount of energy services. And, by placing distributed generation near large loads, CHP can relieve grid congestion, increase the energy security of CHP customers, and eliminate the losses that normally occur in the transmission and distribution (T&D) of electricity from a power plant to the user.
The ORNL report describes in detail four key areas in which CHP has proven its effectiveness and holds promise for the future:
-
Environmental advantages: It significantly reduces CO2 emissions through greater energy efficiency.
-
Promotion of competitive business practices: It increases efficiency, thereby reducing business costs.
-
Local energy benefits: It is deployable throughout the U.S. and may be able to use locally sourced, renewable fuels (depending on the generation technology chosen).
-
Advancing infrastructure modernization: As a distributed generation resource, it can relieve grid congestion and improve energy security.
Challenges Faced by Traditional Energy Sources
In making the case for CHP, the report contrasts its benefits with the growing constraints on traditional energy supplies. Although domestic coal is relatively plentiful, environmental concerns limit its use. Moreover, the cost of building traditional coal-fired power plants has been escalating, driven by pollution control requirements, high construction levels globally, tightness in the equipment and engineering markets, and high prices for raw materials. Overall, capital costs for coal power plants have risen 78% since 2000. General Electric gives estimates of $2,000 to $3,000 per kW for new conventional coal-fired plants, and Duke Energy is proposing to spend $1.83 billion to build an 800-MW plant in North Carolina ($2,300/kW). At $2,500 per kW installed, the delivered price of electricity from Duke Energy to consumers would be roughly 10 to 12 cents per kWh — more than 60% above current average industrial electricity prices.
The report underscores that because CHP facilities are typically placed near large customer loads, less investment in new T&D infrastructure is needed than would be the case for a new conventional central generating station. Additionally, placing generation closer to large customers reduces the likelihood of grid congestion on already-constrained T&D infrastructure.
Hurdles to Overcome
Although the benefits of added CHP capacity are promising, current market conditions and technical barriers continue to impede the full realization of CHP’s potential, according to the ORNL report.
Challenges include unfamiliarity with CHP, technology limitations, utility business practices, regulatory ambiguity, environmental permitting approaches that do not acknowledge and reward the energy efficiency and emissions benefits, uneven tax treatment, and interconnection requirements, processes, and enforcement. Addressing these challenges will require a holistic approach involving policy, regulatory, and technical solutions. Improving the fuel efficiency and fuel flexibility of CHP and developing optimized, integrated packaged systems can also lower costs and expand the application of cost- effective CHP.
Email
Comments
Print
Reuse
