by Richard Baillie

US President Barack Obama proved that he is not averse to dealing with the minutiae of executive office, the boring stuff that other politicians often shy away from.

This attention to detail may have been why Obama last autumn decided to prioritize industrial energy efficiency and signed an executive order to implement combined heat and power (CHP) technology. Obama wants to encourage the creation of CHP for the industrial sector — aimed at facilities like paper-making factories, and aluminum smelters — and is calling for the creation of 40 GW of new CHP or cogeneration facilities by 2020. That, quite simply, is pretty huge. Cogeneration implementation is designed to spur investments in the manufacturing and jobs sector of the economy by decreasing energy consumption in a sector that accounts for over 30% of America’s energy.

Obama may have been swayed by a study a couple of years ago from Oak Ridge National Laboratory that found that boosting the use of CHP to 20% of the generating capacity of the US by 2030 would save 5.3 quadrillion thermal units of fuel per year, which is equal to almost half the total energy consumed by US households. That much CHP could also lead to a 60% reduction in carbon emissions, which is the equivalent of taking 154 million cars off the road.

Or perhaps it was last year’s US Department of Energy report A Clean Energy Solution that noted: ‘The average efficiency of power generation in the United States has remained at 34% since the 1960s – the energy lost in wasted heat from power generation in the US is greater than the total energy use of Japan. CHP captures this waste energy and uses it to provide heating and cooling to factories and businesses, saving them money and improving the environment.’ The report adds ‘CHP can also be an attractive resource for commercial or institutional facilities such as schools and hospitals, in district energy systems, and in military installations.’

Essentially, the Obama initiative is destined to make CHP a catalyst for American productivity and competitiveness while significantly reducing greenhouse gas emissions. Obama wants to encourage the creation of these systems by offering support to states that want to build CHP and incentives to companies that install CHP. Obama also calls for the Departments of Energy, Commerce, Agriculture and the Environmental Protection Agency to convene workshops and research on the subject, and is also looking at ways to encourage the private sector to invest in these projects.

Since his re-election, Obama seems even more committed to environmental concerns. After winning in November he spoke of protecting America’s children from ‘the destructive power of a warming planet’. At his first inauguration, he promised to ‘harness the sun and the winds and the soil to fuel our cars and run our factories’. But now he is making a moral as well as an economic case for energy efficiency. ‘We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations,’ he said at the end of January.

The states are starting to pay attention. In the wake of its battering by Superstorm Sandy, New Jersey has launched new support for large-scale cogeneration and fuel cell installations. And with environmental concerns likely to be high up the agenda of the second Obama administration, watch out for further policy announcements aimed at promoting CHP growth right across the United States.

We will be publishing our annual guide to the US CHP sector soon, which discusses the latest policy and regulation developments, as well as highlighting successful and innovative projects and the companies that serve the industry.

Richard Baillie
Managing editor, COSPP

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