POWER February 2017 - 10

Global Developments
Giving CHP a MuchNeeded
Boost
According to
Agency (IEA),
the
from
1. Co-generation trends. Source: International Energy Agency (2016), Tracking Clean
Energy Progress 2016, OECD/IEA, Paris
International Energy
combined-heat-and-power
global power production
(CHP)
technologies has stagnated since 2000,
lagging far behind growth in conventional
power technologies and commercial heat
generation. Despite having an average efficiency
of 59%, CHP's share of global generation
in 2013 stood at just 9% (Figure
1), the bulk of it at industrial sites in the
chemicals, metal, oil refining, pulp and
paper, and food processing sectors (see
this issue's cover stories).
That may be poised to change, however:
Along with the Paris agreement and
a renewed drive for increased energy efficiency,
a number of countries have of late
implemented policy initiatives that could
spur growth for CHP.
U.S. In the U.S., where CHP has a long
history in the industrial sector, several
market drivers are emerging, the Department
of Energy noted in an April 2016
report. These include lower energy operating
costs, environmental regulations,
resiliency initiatives, utility support, and
project replicability (for more, see " CHP
Update: Policies, Partnerships, and Challenges "
in POWER's February 2016 issue).
Recent policy initiatives on a federal
level include a 10% investment tax credit
for CHP. In August 2012, meanwhile,
President Obama issued an executive order
creating a goal to add 40 GW of new
CHP capacity. Many states have also issued
policies to encourage CHP growth.
The long list of measures (which can be
found in a database curated by the Environmental
Protection Agency at http://
bit.ly/2iLnszC) include electric rates,
feed-in-tariffs, grants/rebates, loans,
portfolio standards, production incentives,
energy plans, and tax incentives.
European Union (EU). CHP thrives in
the EU, generating about 10.5% of electricity
and 15% of heating in Europe.
But according to the European Commission
(EC), increased cogeneration could
lower greenhouse gas emissions within
the EU by up to 250 million metric tons
by 2020, and small cogeneration facilities
could easily supply energy to remote areas
without the need for expensive grid infrastructure.
The executive body for the EU in
November 2016 issued a pivotal package
that renews the bloc's commitment to en10
Electricity
generation n OECD n Non-OECD
Heat generation
n OECD n Non-OECD
n World
n OECD
n Non-OECD
ergy efficiency and introduces provisions
that could enable member states to create
new opportunities for the CHP sector or
reward the added value of cogeneration.
Yet, according to the European Association
for the Promotion of Cogeneration,
the EC could do even more to encourage
CHP, such as tackling lengthy grid connection
times for CHP installations, which " remains
a barrier in many member states, " it
said in November. Incentives should also
reach biomass CHP plants smaller than the
proposed 20-MW threshold. In addition, it
urged, " It is . . . important that the security
of heat supply is one of the main
criteria when grid access rules for industrial
CHP (i.e. priority of dispatch and priority
access to the grid/curtailment) are
decided. "
China. China, which has struggled
to manage endemic air pollution in major
cities, is pursuing active programs
and strict regulations to lower emission
levels and increase energy efficiency.
A specific rule calling for companies in
industrial capitals to switch off and replace
coal-fired boilers before 2018 has
prompted a number of companies to replace
coal plants with gas-fired CHP systems.
In January 2016, for example, MAN
Diesel & Turbo put online a CHP system
for the SAIC Volkswagen Automotive Co.
in Shanghai. Beijing's recently shuttered
coal plants have also reportedly been
partly replaced by four CHP plants.
Japan. Interest in cogeneration in
Japan kicked up in the wake of the 2011
Tohoku earthquake and tsunami under
stricter government energy-efficiency
mandates and proposed carbon dioxide reduction
goals. Japan's CHP sector is gaining
ground because it provides distributed
energy resources that can help prevent
and mitigate disasters. In 2015, the Japanese
government set goals to raise CHP
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generation to 119 billion kWh by 2030.
Canada. In 2015, Canada had about
9.5 GW of installed cogeneration electric
capacity, nearly half (4.5 GW) of which
was installed in Alberta for use in oil
sands and petrochemical operations. Cogeneration
expansion has increased in
tandem with oil sands production, and Alberta's
Electric System Operator expects it
will continue to do so, rising to 5.3 GW by
2022. Cogeneration in other provinces is
commonly produced by utilities and paper
and wood product makers.
Mexico. Mexico's launch of a wholesale
market with retail competition as part of
a wide-scale reform of its power sector is
also provoking interest in CHP projects
(for more, see " Mexico Makes Rapid Progress
on Energy Reform " in the January
2017 issue).
Other Countries. Increasing renewable
energy projects along with falling gas
prices and supportive government policies
to incentivize projects and replace aging
infrastructure in Asia Pacific and Latin
America are expected to drive CHP equipment
demand in the near future.
India to Freeze Coal
Construction, Focus on
Expanding Renewables
A draft national electricity plan published
in December by India's Central Electricity
Authority (CEA)-a statutory organization
that is overseen by the Ministry of
Power-looks to add 101,645 MW of new
conventional capacity during the current
12th Five-Year Plan (2012-2017), nearly
85% of which will be coal-fired. But after
that, through 2022, the country will
refrain from building any new coal capacity,
shifting its focus instead to install a
total of 175 GW of renewable capacity by
that year.
POWER | February 2017
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POWER February 2017

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