New report highlights economic opportunity to advance Combined Heat and Power through new environmental rules

July 27, 2015

WASHINGTON (July 27, 2015) – States may have the opportunity to comply with the Clean Power Plan for clean energy by using combined heat and power (CHP) technology, says a new report published today by David Gardiner & Associates (DGA) and the Institute for Industrial Productivity (IIP). DGA and IIP published the template and report (“Combined Heat and Power (CHP) as a Compliance Option under the Clean Power Plan”) to help states reduce greenhouse gases under EPA’s Clean Power Plan, which is expected to be finalized later this summer.

If implemented in its current form, and if supporting programs are properly designed and structured as part of state compliance plans, the Clean Power Plan could provide a powerful new driver to advance the deployment of Combined Heat and Power (CHP). CHP is an important option for states to consider in developing strategies to reduce emissions and meet their targets under the Clean Power Plan. 

While actual plans will vary dependent upon state-specific factors and determinations, David Gardiner & Associates and the Institute for Industrial Productivity have developed a Template to provide the tools and methodology that states will need to begin the process.

“CHP holds tremendous promise as a way to reduce greenhouse gas emissions, while simultaneously making U.S. manufacturers more competitive; lowering electric bills; and creating jobs in the design, construction, installation and maintenance of equipment,” says Jennifer Kefer, Vice President at David Gardiner & Associates and one of the report’s co-authors.

EPA is expected to set state targets and states will develop plans to meet them. CHP can readily be included in state strategies to comply with the Clean Power Plan. “CHP offers a proven, cost-effective approach to help facilities lower emissions. This template provides guidance to states about how they can include it in state plans and measure and verify emission reductions from CHP projects,” says report co-author, Bruce Hedman, Technical Director at the Institute for Industrial Productivity.

By producing both heat and electricity from a single fuel source, CHP offers significant energy savings and carbon emissions benefits over the separate generation of heat and power, with a typical unit producing electricity with one-half the emissions of conventional generation. These efficiency gains translate to economic savings and enhanced competitiveness for CHP hosts, and emissions reductions for the state. Today, CHP represents 8 percent of electric capacity in the United States (and provides 12 percent of total power generation). Projects already exist in all 50 states, but significant technical and economic potential remains. CHP offers a tested way for states to achieve their emission limits while advancing a host of ancillary benefits.​

Read the report online here.