|By 2020, some 50% of energy consumed in the US will be recycled thermal energy
Credit: 2G Cenergy
It is often said that the UK and US are separated by a common language, but there are real and clear differences between the two countries’ approaches to developing combined heat and power. CHP is firmly entrenched as part of the UK’s energy mix, but many in the industry would argue that this is in spite rather than because of the approach taken by ministers. It is quite a contrast with the US, where federal, state and local governments seem keen to promote cogeneration.
‘The biggest problem in the UK is the lack of long-term consistency from the legislative point of view,’ said Chris Hayton, group business development director at Ener-G, one of the country’s leading CHP system suppliers. ‘Everything’s done in four- or five-year cycles and focussed on the next general election, and you get real uncertainty which is massively unhelpful when people are looking at making multi-million pound investments.’
The really striking feature of the UK’s cogeneration sector is the extent to which it is tilted towards industry. A critical report in 2008 from the International Energy Agency said 90% of all UK CHP electrical capacity was utilised in industrial processes. Not a lot has changed.
‘We now have 87% of CHP capacity in industry,’ said Jonathan Graham, policy manager at trade group the Combined Heat and Power Association (CHPA). ‘The UK [government] has continued to show inconsistency in its treatment of CHP and the role it can play in meeting the UK’s climate change commitments,’ he said. ‘We are seeing an increasing interest in district heating from government. But we have not yet seen the necessary framework put in place to deliver the large-scale infrastructure investment that the heat networks will need.’
Compared to other northern European countries, Britain’s apparent neglect of district heating is remarkable. The UK at present derives a niggardly 2% of its energy from district heating, and this only will rise to 14% by 2025 under the government’s energy strategy. By contrast, Scandinavian cities such as Copenhagen and Malmo draw 96% of their heat from district heating.
‘The main reason is the nature of our energy markets and the fact that the UK electricity market is privatised,’ said Ben Lynch, public sector technical support manager at the Carbon Trust, which advises governments and business on moving to a sustainable, low-carbon economy. ‘In Denmark and Sweden the energy systems operate and are controlled at municipal level, and that’s related to the politics of those countries over the past 20 to 30 years,’ he told COSPP. ‘That kind of happened in the UK in the ’70s, but then we discovered cheap oil and gas and that had an impact on the way we decided to produce heat and power in the future. Countries which didn’t have those resources invested more in district heating infrastructure.’
|The US Capitol Power Plant, built in 1910, produces 620,000 pounds of steam per hour
Credit: Presti & Company
‘The UK market for district heating remains difficult at the individual level partly because of homeowners’ desire to have their own boiler plants, and partly because the district heating systems that were in place in the 1970s weren’t invested in and weren’t maintained properly, and district heating as a result got a very bad reputation’, Lynch said. Good district heating schemes were being started in the UK ‘but it can be difficult to persuade people why they are good investments and very reliable,’ he said.
One problem for the industry was that ‘CHP in the UK has always fallen between two stools,’ he said. ‘It’s not mainstream power generation and it’s also not renewables, so it doesn’t get the support or focus that either of those lobbies get. In the US the attitude is that if this has a commercial justification, it’ll find a way on its own. The Americans aren’t obsessed by green, they’re obsessed with air quality at a local level, decarbonising. They recognise that gas used efficiently has certain environmental advantages over coal and oil, whereas in the UK you just demonise all fossil fuels including gas,’ he said.
He contrasted this with the US (Hayton is also CEO of the group’s Rudox business, based in New Jersey), where ‘once the Americans decide to do something, it gets done’.
America gets it done
US President Barack Obama issued an executive order in 2012 calling for a ‘national goal’ of 40 GW of new capacity by 2020, or a 50% increase in current capacity. This goal is projected to save $10 billion annually in energy costs, generate $40–$80 billion in new capital investment, and reduce emissions equivalent to 25 million cars. According to the Combined Heat and Power Partnership (an Environmental Protection Agency programme), some 5% of all energy consumed in the US will be recycled thermal energy by 2020.
At the end of 2012, the nation had some 82 GW of CHP capacity. Moves to boost capacity peaked between 2000 and 2005, with average annual increases of 2960 MW. Additions slowed between 2006 and 2011, with additional capacity increasing by just 500 MW annually. Additions between 2013 and 2016 are projected to add some 3700 MW in total capacity.
Growth in the UK
There were around 1900 CHP schemes in the UK at the end of 2012, rising from 1327 in 2008, says the Department of Energy and Climate Change. There are four principal types of CHP in the UK: steam turbine, gas turbine, combined cycle and reciprocating engine. In 2012, CHP schemes generated 23,300 GWh, around 6.4% of the nation’s electricity.
While most growth in the past four years had been in the 250 MW–300 MW capacity industrial sector, ‘we have seen growth in the small-scale sector,’ said Graham. ‘We see that small industrial users, commercial users are using CHP as a way to mitigate the rise in energy costs’.
In 2012, the oil and gas terminals and refineries sector had the largest share of total CHP heat generation at 34%, followed by the chemicals sector at 31% and the paper sector at 10%. In 2012 CHP schemes generated 23,300 GWh of electricity, around 6.4% of all electricity produced in the UK. In 2012, 65% of fuel used in CHP for heating was gas; renewable fuel accounted for 7%, a 15% increase from 2011 levels.
The CHPA envisions ‘an energy system that is dictated by the consumers’ needs rather than one that dictates to them’. To make this a reality, the association focuses on ‘technologies and services that have not reached their potential under our current, centralised approach.’ Dr Tim Rotheray, CHPA director, said that ‘what we are increasingly finding is that our members are engaged in a solutions-based approach to energy and the one thing that defines them is that they’re local energy, decentralised, and engaging with the user, be that the householders on district heating, the industrial users at manufacturing sites. The CHPA set energy security, cost and emission abatement as its three goals and looked for the most cost-effective way of doing all those things.’
Outlining differences in approach between the UK and US industries, Rotheray said a key development in America was that, following Hurricane Sandy which hit the eastern seaboard in 2012 and knocked out electricity in New York City, it was recognised that ‘diesel units were able to run until the diesel ran out, but CHP assets connected to the gas remained intact, electricity was maintained and they stayed with their lights and heating on’. Gas turbines did help keep the lights on, but they were less efficient than CHP ‘so they move the challenge away from electricity to security and on to gas, and this is where CHP comes in.’ This was a debate in the US power industry but it had not yet taken off in the UK, he said.
Hayton agreed that the freak US weather showed the big advantage of cogeneration: ‘You can use cogen as a tool for resilience; we’re very, very focused on using cogen to improve security of supply for education campuses, hospitals, etc’. During Sandy, the biggest problem was that nobody had access to fuel. ‘All the standby generators supporting the mobile phone networks had a finite amount of diesel, and they all ran out’. Hayton said that ‘we do a lot of gas standby, and the natural evolution is using gas CHP to also act as standby. We do it occasionally in the UK; we’ve a number of CHP sites that are also capable of running as standby generators. But the Americans are far more switched on to the benefits of doing that’.
On a small but symbolic scale, for example, the Architect of the Capitol – who manages and maintains the US capital, the Supreme Court and the Library of Congress – recently identified cogeneration as the ‘preferred solution’ for reducing energy and heating costs. A project under development would install a cogeneration system that converts residual heat and steam to energy for Congress, the Supreme Court and some 23 government buildings.
The proposed system consists of two 7.5 MW combustion turbines and two heat recovery steam generators rated at about 71.9 million BTU/hour, using natural gas as its primary fuel source. It would build on a long-standing cogen tradition: the Capitol Power Plant, built in 1910, currently produces 620,000 pounds of steam per hour to heat the buildings, but not electricity. The addition is being funded with a $2 million budget authorised by Congress in 2012. Cogeneration has been ‘successfully implemented’ at other federal government buildings including the National Institutes of Health and the General Services Administration, and the AOC sees cogeneration as having ‘a dramatic impact on emissions regionally’ in the District of Columbia, Maryland and Virginia by significant reductions in NOx, SOx and greenhouse gases.
As for the government’s clear growth targets, cogeneration’s appeal has intensified through many intrinsically American precepts that factor into the country’s policy framework: America’s large landmass; its aging electrical infrastructure; the move toward decentralised power delivery systems; the safety of supply amid natural disasters or climatic events, and the fact that many CHP systems are fully integrated into an existing plant, and therefore not considered an additional terrorism risk.
|The 250 kW biogas plant at the UK’s Chatham-Kent Water Pollution Control Plant Credit: CEM Engineering|
Susan Wickwire, director of the EPA’s CHP partnership, says that most regulation occurs at the state or local level or by public utility commissions, a marked difference from the UK, where central government regulation is more important. Air and emissions regulations can be imposed at the state or federal level depending on the size and location of the system. Examples of local permitting include fire department regulations, gas pressure monitoring, or local jurisdiction over a turbine installation. Some states such as Texas and California, which are traditionally invested in refining or petrochemical industries, have moved to streamline the permitting system. In states with a lower industrial base, permitting can remain a barrier to CHP uptake by smaller businesses.
Wickwire pointed to incentives for CHP, including a $100 million New York state programme alongside similar federal-local partnerships across the US, adding that the public sector plays a significant role in encouraging CHP uptake through federal departments such as those for energy or housing and urban development, or in federal responses to natural disasters.
Rob Thornton, president and CEO of the International District Energy Association, also sees significant differences between the UK and US markets.
‘The US is a much larger landmass with a large climate range. Heat is very important north of Washington, DC but less important south of the Mason-Dixon [line], where cooling is the primary thermal requirement,’ he says.
‘The paradigm shift we’re seeing in the US is driven by resiliency,’ Thornton adds. ‘We’ve had superstorm Sandy, which was very much a defining moment. The systems that stood up to Sandy were CHP microgrids. Mayors who are responsible for their citizens’ safety are also very concerned about business operations continuing.’
He says that industry consolidation has led many mayors, city sustainability officials and regional development planners to look outside their traditional relationships with power conglomerates to secure fuel supplies locally, citing available feedstocks including surplus heat, biomass and waste energy. He told COSPP that CHP systems are easily adaptable to fluctuations in feedstock supply and pricing.
‘The price of biodiesel today is not competitive with natural gas, but in 10 years, will price curves flip? CHP can accommodate that with something as simple as a valve change versus having to retrofit 200 boilers. Many campuses have converted to biomass, wood waste, tyre-derived fuel, corn stover. Local waste streams become the input fuel,’ he said.
Michael Turwitt, president of 2G-Cenergy Power Systems Technologies, said that ‘the government and EPA are pushing hard toward using free fuel’ as part of a ‘new trend in the last two years where government is actively steering the industry toward CHP.’ But while the ‘stable’ market is growing ‘organically’ every year, he says the US is ‘far away’ from the subsidies that he regards as ‘wonderful European incentives.’ This is due in part to a uniquely American outlook on the role of government, he says. ‘The US has always been a market where government doesn’t believe in funding artificial boom markets which only survive as long as free money is poured in, where as soon as the money stops, the market collapses.
‘The American government and individual states are incentivising very carefully. [There is] money in grants, cheap finance models supported by programmes, tax incentives, but you cannot build a CHP plant for free.’
Craig Howie is a journalist based in Washington, DC. Alan Osborn is a journalist based in London.