The precipitous drop in energy prices is having repercussions throughout the energy industry, and nowhere is this felt more profoundly than in the energy capital of Houston, Texas. In the US we have 50 states, each of which has a distinct market profile for CHP and distributed power generation. While the Texas economy has diversified in recent years, it is still very much an energy town and when prices fall as far and as fast as they have, there is going to be some pain experienced. It is estimated that there could be 130,000 job losses in Texas by this summer as a result of the drop in energy prices. While energy prices seem to be slightly rebounding, natural gas prices remained remarkably low throughout the winter in the US, notwithstanding the record low temperatures and snowfalls that many parts of the country experienced.

The flip side of this price slide is that interest in efficiency measures, such as CHP, is escalating as companies look for solutions to increase productivity and reduce costs. WADE is having a conference this April that will focus on CHP for the industrial sector and the many new opportunities for CHP in areas such as oil and gas, chemicals, processing and others. We will hear from none other than Pat Wood, a Texan who served as Chairman of the Federal Energy Regulatory Commission in Washington and who currently serves as Chairman of the Board of the power company Dynegy. In addition, neighbouring Mexico is undergoing an energy renaissance as it opens up its markets to foreign investment, which is creating a range of opportunities for energy projects and infrastructure.

The US energy boom has created a remarkable industrial expansion in the Gulf Coast area. According to the American Chemistry Council (ACC), the shale-related chemical investment has officially topped $100 billion which will create 55,000 permanent jobs in the chemical sector.

While the Obama administration is giving out mixed messages on energy policy, with the recent veto of a bill that would have allowed the Keystone Pipeline project to move forward and announcement of methane regulations that will impact the natural gas production and delivery sectors, the Executive Order that articulated a goal to increase the use of CHP in the United States by 40 GW by 2020 remains in effect. The Clean Power Plan announced by the EPA will also create new and significant opportunities for CHP, as it can be used as a mechanism for compliance with the new emission targets.

While the US is comprised of 50 unique states and there are 50 shades of the market for decentralised energy throughout the country, we are excited by the strong opportunities that lie in the Gulf region and with industrial customers. We hope that you can join us in Houston.

David Sweet   David Sweet
Executive Director
World Alliance for Decentralized Energy
dsweet@localpower.org