CHP reaching new US markets

Date: 10 March 2016

Two north-eastern US states have upped their support for decentralized energy – and CHP in particular – in recent weeks, adding to optimism that market conditions are good for CHP growth in the US for the next few years.

New Jersey is leading the way with the CHP and fuel cell section of its Clean Energy Program; two supermarkets and a food manufacturer are the latest recipients of funds to support the installation of new CHP schemes. Meanwhile, in January the State of New York announced a new $5 billion Clean Energy Fund to support, among other initiatives, the growing solar electricity market and further research into distributed energy technologies.

New York is one of the largest CHP-using states, with nearly 6 GW of generating capacity already in place across both the industrial and commercial sectors – according to the highly informative Department of Energy CHP Installation Database. New Jersey has just 3 GW of capacity, most of which serves industrial sites in the state. And, while industrial sites still make up the great majority of installed CHP capacity across the whole US, the commercial sector has come to the fore in recent years and is expected to host more than half of new capacity coming on-line in the coming years.

With its major oil refineries offering obvious sites for large-scale CHP plants, Texas is far and away the largest single user state in the US, with 17.5 GW of capacity, nearly all of which serves industrial sites. Adjacent Louisiana is the third largest user state, with an even greater proportion of its 6 GW of CHP plants used at refineries and other oil and gas processing facilities.

The second largest user, California shows a different split, with only half of its nearly 9 GW of CHP capacity serving industry. California operates two active support programs; one of which calls for another 6 GW of CHP capacity to be installed by 2030.

Now, record low gas prices are among the conditions said to favour CHP growth in the US for both buildings and industry. Supplies of shale gas have helped reduce gas prices and increased ‘spark spreads’ – the difference between the prices of input fuel and electricity output – in many areas. Add to this the growth in use of small-scale, factory-packaged CHP systems and the corresponding supplier-funding business models pioneered in Europe, and CHP is reaching new markets in many US states.

Source: COSPP