Industrial-scale CHP and waste heat recovery could be set for a significant boost after a US Department of Energy (DOE) announcement that it wants America’s manufacturing and information technology sectors to do more with less energy. DOE is directing $256 million in stimulus package grants to help out.

The funding includes $50 million for projects that can lead to more energy efficient IT and communication technology, and another $50 million for developing advanced materials for clean energy technologies and energy-intensive processes. But the largest portion is $156 million for projects to install CHP systems, waste energy recovery systems and more efficient industrial equipment.

DOE sees plenty of scope for new CHP installations. According to a December report, roughly 9% of American factories that had CHP systems in 2006 produced about 500 GWh of electricity, or about 12% of all the power consumed that year. Growing the number of factories using CHP to 20% could save the same amount of power that’s used by half the households in the country today, the report found.

New CHP installations could also generate $230 billion in new investment, and create nearly one million jobs, making it a prime stimulus target.