Smaller plants dominate US CHP markets

Date: 25 March 2015

Small-scale packaged CHP units to serve a school in New Jersey and a university in Massachusetts; and a 3.5 MW CHP plant fuelled with waste gas to supply steam and electricity at an ethanol facility in California – these are three of the latest CHP plants to be installed in the US this year.

Now, a couple of weeks ahead of the ‘DistribuGen’ conference and trade show dedicated to cogeneration/CHP and to be held in Houston on 7-9 April, might be a good time to take a look at the shape and size US distributed generation scene.

Curiously, this is best done using the ‘Scorecard’ for the US, published last year by the International Energy Agency. This shows that annual CHP plant installation rates have risen slightly in the last couple of years, but are still well below the 6–7 GWe of new capacity installed in both 2001 and 2002. The figure for 2012 was just 1 GWe.

Statistically, the great majority (86%) of US installed capacity, measured in GWe, serves industrial sites, but most of the plants installed in recent years have been smaller-scale units to serve the commercial sector. District heating and cooling is another important and growing sector in the US – nearly a quarter of installed CHP capacity supplies city and campus schemes.

As in Europe, the heyday of new CHP plants at giant industrial and manufacturing sites are largely over – and packaged, smaller units for buildings and smaller industrial sites are the modern success story. While much greater in number, the generating capacity of these units doesn’t match those of largest industrial schemes.

The US picture is complicated by enormous state-by-state variations, with California, New York and Connecticut far ahead in terms of policies to support CHP technologies, although 34 states operate incentives of some sort. The picture also varies with local electricity prices, energy market structures and degree of industrialization. Chemicals and refining facilities in the Gulf coast states – and in Texas – mean these areas hold the highest amounts of CHP capacity.

There is much optimism for the future, as currently low gas prices and plentiful supplies both work in favour of CHP. Also there is considerable support from federal (as well as state) agencies – including assistance in support of President Obama’s target of an additional 40 GWe of CHP capacity by 2020. The mood in Houston in a couple of weeks may well be lively.

Source: COSPP