CHP as a Greenhouse Gas Reduction Strategy

CHP as a Greenhouse Gas Reduction Strategy CHP/DG and Emerging Fuels June 26, 2007 Tom Frankiewicz, EPA CHP Partnership Overview • Benefits of CHP – efficiency and environmental benefits – as part of GHG strategy • Recognizing environmental benefits • Monetizing environmental benefits • Resources through the CHP Partnership and EPA Advantages of Combined Heat and Power (CHP) • More efficient than separate generation Reducing fuel use of electricity and heat. • Lower operating cost. Reducing O&M, Fuel Higher efficiency translates to reduced fuel consumption. • Reduces emissions of all pollutants. Monetizing Environmental Benefit Renewably-fueled CHP is CO2 neutral. • Increased reliability and power quality also adds significant value. Disruptions Avoiding Business Efficiency Advantages of CHP Criteria and GHG Reductions • Efficiency gains translate to emission reductions: – SO2 – NOx • Commensurate greenhouse gas reductions. Greenhouse Gas Benefits of CHP- CO2 Recognizing Environmental Benefit • Key to encouraging CHP-DG is in recognizing it’s primary benefits: – Higher efficiency – Onsite thermal and electrical generation (avoid transmission & distribution losses) – State-of-the-art technology (emission offsets) • CHP can be most (cost) effectively installed during new build or boiler replacement/equipment upgrade. CHP as GHG Strategy • Efficiency • Can be Renewable Energy Measure • Works in conjunction with other measures (efficiency, onsite power generation, renewable energy purchases) • Recognized in USGBC LEED certification • Strategy under voluntary commitments Benefits of Clean Energy (EE, RE, and DG) • Economic – Lower cost compared to new generation and transmission – Downward pressure on natural gas prices  “Clean Energy” includes cost– Lower wholesale electricity prices effective energy – Improved local economy efficiency (EE), – Improved service to low income and seniors renewable energy • Risk Management (RE), and clean – Diversify a utility’s generation supply portfolio distributed – Reduce environmental regulatory risk to utilities generation (DG) such as combined • Environmental – Lower greenhouse gas emissions and air pollutants heat and power (CHP). – Lower water use • Utility System Benefits – Quick fix with longer term benefits – Improved security of electricity and gas systems – Lower peak demand / improved reliability Environmental Revenue Streams Definition: Any number of programs that reward clean power generation and provide one time or ongoing revenue source. Emissions Programs • Emission allowance trading programs (cap and trade) • New source emission offset programs • CO2 offset programs Generation Programs • Energy portfolio standard programs • Voluntary green power purchases Project Resources • Procurement Guide • CHP Emissions Calculator • Funding Database The EPA CHP Partnership • Voluntary program - seek to reduce the environmental impact of power generation by promoting the use of CHP. • Actively providing education/outreach and direct project assistance since 2001. • Provide services and tools for Partners to assist with CHP project development, regulatory barriers, market transformation. • Work with government and environmental community to evaluate environmental benefits of CHP. Resources for Greenhouse Gas Strategy CHP Partnership Tom Frankiewicz frankiewicz.thomas@epa.gov 202.343.9794 Or visit our website at www.epa.gov/chp