Why Isn't the US Doing More to Support CHP?

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Solar and wind power projects are much in vogue this year supported on the one side by environmentalists keen to see us move to a low carbon future regardless of the cost and on the other by politicians keen to secure funding for their regions that could lead to employment and favorable headlines. Am I being unduly critical in those comments? May be, I am sure most of those involved are motivated by the best of intentions but sometimes when everyone jumps on the same bandwagon some more deserving causes get overlooked in the headlong rush to subsidize this or that. The technology being overlooked and which is capable of delivering so much more than wind power or solar power for a fraction of the cost is Co-generation or Combined Heat and Power (CHP) Technology.

CHP can be applied to pretty much any process that involves the production of electricity or thermal energy, by which I mean supplying heat for industrial or commercial activities. Take electricity production for example, according to Richard Munson, Senior VP Strategy of Recycled Energy Development (RED) quoted in a YouTube recording of a short but interesting speech recently that the energy efficiency of electricity generation has barely changed since Eisenhower was in the White House. It still takes 3 units of fuel to make one unit of electricity. The balance 67% is wasted as heat and yet the focus is on trying to remove at great cost the CO2 from that waste, rather than finding ways to reduce the amount of electricity required in the first place or trying to produce more energy from the original three units of fuel than the paltry 33% efficiency rate that is the norm. The same can be said of many industrial processes, in a recent article on FoxNews Michael Tobin makes a compelling case for the application of CHP by describing the example of ArcelorMittal at a steel plant of theirs in East Chicago. AM takes coal and reduces it in coke ovens to pure carbon coke used in the smelting of iron in the company’s blast furnaces. This is done in some 260 coke ovens where the coal is heated and in a controlled burn the impurities are driven off – in the process a huge amount of heat is consumed and released.  AM partnered with RED and installed boilers on the top of these coke ovens to capture the heat before it dissipated into the atmosphere. The steam from the boilers was then used to generate some 220 MW of electricity and in the process AM saved US$100 million per year. In fact that one project is said to generate more clean energy than all the clean energy projects in the US MidWest.

West Virginia Alloys, a silicon producer, reduces quartz to silicon in furnaces heated to 3000 degrees requiring a huge input of thermal energy. They then cooled the product with chillers so that it could be handled and stored. By incorporating a CHP system WV Alloys now generates 45-50 MW of electricity and saves US$65m per year. As a result, they have become so efficient the business has expanded, they have added a new furnace and employed an additional 30 workers.

Saving the planet needn’t cost money, it can be a great money spinner. 69% of all CO2 emissions in the US comes from electricity generation and thermal power production yet nearly all the financial incentives are poured into car emissions and wind/solar power production.

The good news according to a Chicago Tribune article is that opportunities for similar efficiency gains abound in the US. According to the Department of Energy’s Oak Ridge National Laboratory, a large-scale expansion of co-generation could provide 20% of U.S. generating capacity by 2030, generate $234 billion in new investment, and create nearly 1 million jobs. Such an expansion would also reduce carbon dioxide emissions by more than 800 million tons per year, the equivalent of taking more than half the current U.S. passenger vehicles off the road.

And hey here is one other big advantage of CHP. Unlike solar panels or wind turbines the US doesn’t import this technology or the jobs that go with it from abroad. Although the US lags many other parts of the world in applying the technology it is more than capable of applying the techniques via home grown engineering firms.

–Stuart Burns

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