Energy Efficient Infrastructure for More Resilient Local Economies: The Role of District Energy, CHP

May 8, 2013—The Environmental and Energy Study Institute (EESI) held a briefing on how District Energy, Combined Heat and Power (CHP) and Microgrids can make local energy supply more reliable and more resilient in the face of more frequent severe weather events that have caused electricity supply disruptions and serious economic losses. This briefing provided a technology overview, showcased relevant case studies, reviewed related pending legislation, including The Local Energy Supply & Resiliency Act of 2013 and The Master Limited Partnerships Parity Act, and discussed key policy drivers to accelerate industry growth as called for in Executive Order 13624, Accelerating Investment in Industrial Energy Efficiency.

• Rob Thornton, President and CEO of the International District Energy Association, noted that a standard District Energy and Combined Heat and Power (CHP) plant uses 80-plus percent of the energy generated from its input fuel, compared to 40 percent efficiency for a standard power plant. He added that the average coal-powered plant only converts 32 percent of the coal's energy into electricity.
• Mr. Thornton discussed Denmark's extensive use of district energy and the installation of a thermal transmission network in a power plant in Copenhagen, taking its efficiency to over 90 percent.
• Mr. Thornton also drew attention to a 40 MW cogeneration (CHP) plant in New York's Co-op City in the Bronx, which kept power on throughout Hurricane Sandy.
• Senator Al Franken (D-MN) pointed out that in St. Paul, Minnesota, 80 percent of the buildings downtown are heated and cooled by combined heat and power (CHP). Sen. Franken said that although CHP has high upfront capital costs, they pay for themselves in energy savings, making them good investments.
• Ted Borer, Energy Plant Manager at Princeton University, described how Princeton's generator naturally converts about one third of its fuel to useful electricity. Using a boiler to recover the excess heat generated, their system is boosted up to an efficiency level of 60 to 80 percent.
• Mr. Borer had four tips that he said are essential for micro-grid reliability:
  • Base-load generators so you can create your own energy
  • The ability to run "isochronous," or off the grid
  • The ability to start your own system when the grid goes down
  • And the ability to cut off service to less important areas to preserve power to essential areas, also known as "load-shed capability."
• William DiCroce, CEO of Veolia Energy North America, discussed how versatile CHP is, as it can operate on a large or small scale. He said urban areas are especially suitable for district energy/CHP, highlighting Boston, New York, Philadelphia and St. Paul as large cities with successful CHP/district energy systems in place. Half of downtown Boston is heated by one steam pipe from one power plant, saving 150,000 tons of carbon dioxide each year.
• Mr. DiCroce pointed out that in Boston, the use of CHP technology has averted 310,000 tons of released carbon dioxide. To provide context, he noted it would take 600 football fields' worth of solar panels to have the same impact.
• Ken Smith, CEO of Ever-Green Energy, Inc., discussed how nearly 50 percent of total wasted energy in the United States is from waste heat produced in electricity generation. In 1970, the United States wasted 49.5 percent of the energy it produced; in 2010, that percentage had risen to 57.3 percent. Energy efficiency of electricity production has not improved but significantly declined since 1970.
• Mr. Smith quoted the Quadrennial Technology Review by the DOE, which stated that 60 percent of primary energy is lost as waste heat.
• Mr. Smith said legislation is necessary to help CHP's widespread implementation. He discussed waste heat recovery legislation under consideration in Minnesota that would enable companies to count their waste heat recovery as part of their savings goals.
• Mark Spurr, Legislative Director of the International District Energy Association, discussed the Master Limited Partnerships (MLP) Parity Act (S. 795 and H.R. 1696), a bipartisan bill in the Senate and House which would amend an existing law to provide the same tax benefits to renewable energy sources (including the recovery of waste heat) that currently can be used only by fossil energy projects. The law helps avoid double taxation of the corporation and individual shareholders, by taxing an MLP only at the individual shareholder level.
• Mr. Spurr also talked about legislation Sen. Franken plans to introduce, the Local Energy Supply and Resiliency Act (LESRA), which would help industry, communities and universities get access to low cost loans to begin projects using renewable energy or waste heat recovery.
• Mr. Spurr estimated that around 36 percent of total U.S. energy consumption is waste heat, the majority of which comes from power plants.