Report: Combined heat and power could help fill generation gap

Energy efficiency, and combined heat and power (CHP) in particular, represents significant near-term opportunities to make highly cost-effective investments in new energy resources, according to a report by the American Council for an Energy-Efficient Economy.

The report targets 12 U.S. states, predicting the likely amount of coal-fired electric capacity to be retired in the near term plus the potential for CHP to meet some of that lost capacity. It finds that, while CHP is not positioned to fully replace the lost capacity, it can play a substantial role in meeting these needs.

Two of the states targeted could replace 100 percent of their lost capacity, and two others could replace over half. This report also finds, however, that most of the states that are facing higher levels of coal retirement do not have most of the critical policies in place that yield a healthy investment environment for CHP.

This report also analyzes the impact that substantial investment by utilities would have on the CHP market. Utilities are able to take a longer view on investments in capital expenditures and are thus able to accept longer payback periods than a typical industrial or commercial entity. It finds that investment by utilities would substantially boost the amount of CHP deployed in the 12 target states, but that all of those states lack the policies and regulations that would encourage utilities to make such investments.

The entire report is available here.

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