POWER February 2016 - 18

COMBINED HEAT AND POWER
CHP Update: Policies,
Partnerships, and Challenges
Courtesy: Greenberry/NAES
Though combined heat and power (CHP) is getting increasing attention as a means
of efficiency and reducing carbon emissions, the sector's traditional challenges remain.
But some generators and policymakers are working hard to deploy CHP in
new and more economic ways.
Thomas W. Overton, JD
C
ombined heat and power (CHP) is hot
again-in more ways than one.
After a surge in capacity during the
1980s, kick-started by the 1978 federal Public
Utility Regulatory Policies Act (PURPA) that
was designed to combat high oil prices, CHP
has since lagged in the U.S., especially after
PURPA's incentive structure was changed in
2005 (see " CHP: A Rocky Path for a Promising
Approach " in the February 2015 issue).
But CHP is seeing new interest, driven
by a combination of stubbornly low natural
gas prices and new policy support driven
by environmental and reliability concerns.
Both government agencies like the Environmental
Protection Agency (EPA) and industry
groups like the Electric Power Research
Institute (EPRI) have recognized that CHP
offers a way for traditional generation technologies
to boost efficiency and remain part
of the power mix as renewables continue to
increase their share.
Rethinking CHP
CHP has long been popular in Europe, where
district heating is more common, and among
self-generating industrial customers around
the world. For industrial CHP, the availability
of low-cost " opportunity fuels " is often an
added advantage. For example, among several
new industrial CHP plants is a project in
18
Turkey built by Outotec for Modern Karton,
a major European manufacturer of packaging
paper and corrugated cardboard materials
from waste paper. The incinerator designed
by Outotec uses byproducts such as paper
rejects, biological sludge, and paper sludge
from Modern Karton. The CHP plant produces
electricity for the network and steam that
is used in the paper production process.
But in the U.S., largely thanks to PURPA
and other problems in the past, utilities remain
wary of CHP they don't control. That's
led think tanks like ICF International to look
at ways to bring those utilities in from the
figurative cold.
Anne Hampson, a project manager with
ICF, who coauthored a 2014 report, " From
Threat to Asset: How Combined Heat and
Power (CHP) Can Benefit Utilities, " spoke
to POWER in December about ways utilities
can make CHP work, at least in areas where
they're allowed to own generation.
" Traditionally, you would put power plants
out in the middle of nowhere so that people
don't have to see them, but when you do that,
you are limiting yourself geographically because
you are not located near people who
can use the thermal energy, " Hampson said.
" And the further away you are, the less likely
you are going to have ways to deliver steam
to potential customers. "
www.powermag.com
Hampson pointed to Great River Energy's
Spiritwood Station in North Dakota (a 2015
POWER Top Plant) as an example of strategic
colocation. The plant was built to serve
adjacent industrial thermal loads as well as
supply power to the grid. Doing so enables
this coal-fired plant to meet EPA emissions
guidelines under the Clean Power Plan because
of its high efficiency. Great River also
took advantage of a similar arrangement at its
Coal Creek plant, partnering with an adjacent
ethanol plant to supply process steam. Hampson
pointed to district heating systems as another
potential use for CHP steam output (see
the sidebar " Steel City Steam " ).
" Co-siting can be really beneficial, " she
said, " if you look at where your existing
industrial customers who need steam already
are. If they're having to produce it in
a boiler, but they could get it from a power
plant, that's a perfect means to do so. More
recently, we've seen a lot of focus on how
that kind of siting for power plants can take
advantage of it. "
The customers get less-expensive steam
and lower capital outlays, while the plant
owner can substantially boost efficiency and
thus reduce average emissions per megawatt.
And there's a lot of opportunity out there.
According to the ICF report, there's about
130 GW of technical CHP potential in the U.S.
POWER | February 2016
http://www.powermag.com
POWER February 2016

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