Combined heat and power as a platform for clean energy systems

Abstract

Many regions and countries including Europe, China, Japan, and Canada are expanding their combined heat and power (CHP) systems, often coupled with renewable fuels, to provide platforms for clean energy. In the United States, however, CHP market shares are. A cost-benefit analysis of CHP systems in Georgia (an industry-heavy state in the Southeastern U.S.) suggests that the benefits from reduced fuel costs and steam production far exceed the CHP installation and O&M costs. We estimate other benefits, as well, including jobs, cleaner air, public health, and a 2–13% reduction in Georgia’s total carbon emissions. However, the capital-intensive nature of CHP systems can be difficult for host industries, and utilities are reluctant to purchase their excess electricity. Possible approaches to address these barriers include clean energy portfolio standards, regulatory reform, financial incentives such as tax credits. By developing a comprehensive case study methodology for evaluating the expansion of CHP systems, analysts can examine the costs and benefits of cogeneration in other regions with their particular industry profiles, fuel costs, and policies. Analysis of key stakeholders and policy options adds social and behavioral insights for the design of effective government interventions to capture the economic and social benefits of CHP systems.