Michigan has vast potential to generate electricity by taking advantage of wasted energy at industrial and other facilities.

That’s the view of a new collaboration of clean energy groups, Grand Rapids-based Sustainable Partners who assert that the state has 10,000 sites capable of deploying more than 4,000 megawatts of electricity from combined heat and power systems.

The team — which includes modelling consultants, university researchers and clean tech experts — was recently selected for a two-year, $310,000 grant from the state of Michigan and the US Department of Energy. State energy officials want to tap into the potential of CHP as a way to meet carbon reduction and energy efficiency goals embraced this year by Governor Rick Snyder.
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“Because of the number of applications out there, it’s a good market in terms of potential,” Greg Northrup, a principal at Sustainable Partners who is working with a team of clean energy groups on studying the potential for the technology. said. “It’s underdeveloped.”

Right now, about 100 sites in Michigan use the technology according to MidWest Energy News.

Valerie Brader, executive director of the Michigan Agency for Energy, in a statement, said,
“The various combined heat and power technologies present an opportunity for many companies in Michigan to reduce their energy costs and for us as a state to lower carbon emissions in line with the Governors’ Accord for a New Energy Future signed by Governor Rick Snyder and 16 other governors in February 2016,”

“The accord represents a commitment to diversify energy generation and expand clean energy sources, modernize energy infrastructure, and encourage clean transportation options.”

Analysts say lack of take-up can be attributed to a lack of knowledge among utility customers and policy barriers around standby rates, or what utilities charge for providing a certain amount of backup power. Lower standby rates could provide a quicker return on investment.

Installers have faced challenges in recent years as low natural gas prices have prolonged the payback on what are otherwise expensive systems. According to the Energy Finance Report published by the energy law firm Sullivan and Worcester, installing CHP makes the most sense when a building’s heating needs are high; it has aging boilers; electricity prices are higher than 10 cents per kilowatt-hour; or boiler retrofits “are needed to satisfy new environmental regulations.”