State lags on adopting single source heat/power systems

PHILADELPHIA – Highly efficient systems that generate heat and power from the same fuel source are still relatively scarce in Pennsylvania despite great potential to use the technology with the state's newly abundant natural gas, experts said at a hearing on Monday.

People who use, sell or promote combined heat and power technologies told members of the Public Utility Commission during the hearing at Drexel University that the systems, most often used in manufacturing or at large facilities like hospitals and universities, offer one of the most valuable local uses for gas produced from the Marcellus Shale.

"We're suggesting certainly that combined heat and power is an excellent method of converting that [natural gas] resource to power and heat in the most cost-effective manner possible," said Gearoid Foley, a senior technical advisor for the U.S. Department of Energy's Mid-Atlantic Clean Energy Application Center.

Combined heat and power systems recycle heat that would otherwise be wasted during manufacturing or power generation to create more electricity or heat or cool buildings. The systems are generally built on site at factories or campuses.

The practice is more than a century old. It has been used in Pennsylvania since a paper mill adopted the technology in 1929, according to a 2011 study by the Department of Energy. But after a decade of growth when combined heat and power generating capacity quadrupled in the state between 1985 and 1995, adoption of the systems "virtually stopped" between 2000 and 2010, the study found.

Interest in the technology is rising again as companies look to save on energy costs, reduce their greenhouse gas emissions or build more resiliency against power outages. But those testifying at the hearing also detailed obstacles to more widespread adoption in Pennsylvania, including the upfront costs of investment in the complex systems, lack of access to natural gas pipelines in some areas, and ambiguity in grant programs that leave potential project owners uncertain if they qualify for funding.

There are now 95 major combined heat and power sites in the state that generate 7.2 percent of Pennsylvania's total electricity, or 2,638 megawatts, the PUC said.

Witnesses emphasized that any policies that the state adopts to promote combined heat and power should be stable and long term or else investors will be reluctant to start new projects.

"CHP projects take time to develop," said Richard Sweetser, a senior technical advisor for the Mid-Atlantic Clean Energy Application Center. "Uncertainty creates chaos."

PUC Chairman Robert F. Powelson said the commission hopes to use the information from this and a possible future hearing in Western Pennsylvania to craft combined heat and power policy recommendations for the governor or legislature.

Laura Legere:

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