Is CHP the answer to coal retirements?Utilities across the country could use highly efficient combined heat and power (CHP) to more cheaply replace a substantial portion of the coal-fired electric-generating capacity expected to retire in the near term, according to research by the American Council for an Energy-Efficient Economy (ACEEE). The research focuses on coal retirements in 12 energy-intensive manufacturing states, including West Virginia, Alabama, North Carolina, South Carolina, Kansas, Colorado, Georgia, Indiana, Iowa, Kentucky, Louisiana and Ohio. By encouraging utilities to invest in CHP on customer sites, states could more easily meet future demand and offset some or all of the need to invest in new power plants, ACEEE contends. While traditional power plants waste heat by releasing it into the air or nearby water, CHP systems capture it and put it to productive use, such as generating steam that is then used in manufacturing processes, according to ACEEE. The ACEEE research breaks down the argument into dollars and cents. A typical new natural gas-powered CHP system can generate electricity at .06 cents/kWh while the cost of new natural gas-powered traditional generation or nuclear-powered generation can range from 6.9 to 11.3 cents/kWh. Further, CHP can generate electricity and thermal energy at efficiencies of up to 85 percent, while the average electric generation efficiency of U.S. power plants is about 33 percent. "Our report suggests that instead of investing in new centralized power plants, utilities should invest in new CHP plants to keep costs down for their customers and generate much cleaner electricity," said Anna Chittum, the report's lead author. "Utilities around the country have expressed concern about the amount of coal-fired capacity they believe they will need to retire in the near future. Many are asking for substantial increases in customer rates to pay for new investments in traditional power plants when they could be investing in CHP instead." The challenge remains that most states facing substantial coal retirements lack policies to encourage utilities to invest in CHP. ACEEE urges policymakers and regulators to implement policies that allow utilities to earn a rate of return on CHP as they do on other capital investments. For more: |