Combined Heat and Power Segment Grows Across U.S.

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Continuing to cover what we consider leading sectors of the power generation market, we take a look at the combined heat and power (CHP) market. Industrial Info has been tracking CHP projects and trigeneration projects for several years in its project platform. These units and plants are usually classified as industrial energy producers and encompass a number types of subsectors like waste heat-to-power and district energy sites.

Why would a CHP project be considered for installation? The reasons are many. Economics is always a factor, as are environmental regulations and guidelines, current grants and funding opportunities from state and federal agencies, increased efficiencies, enhancing a site's energy reliability, and a reduced need for infrastructure, such as transmission and distribution equipment.

There are several grants and funding opportunities available for CHP projects. One was put into place in 2012 by an executive order from then-President Barack Obama to encourage the development of 40 gigawatts for combined heat and power generation by 2020. With this, there are a number of incentives and grants available from agencies like the Department of Energy, Environmental Protection Agency, Department of Homeland Security and Department of Defense.

On top of this, there are state programs, such as that of Massachusetts, which gives up to $40 million dollars for combined heat and power projects, or the state of Illinois' $2 million grant program for CHP projects, to just name two out of a large list.

Taking a look at the overall market for the U.S, one can see that there is a significant spending. According to the U.S. Energy Information Agency, the installed capacity of the CHP generation in the United States is roughly about 84 gigawatts of power generation at about 4,400 industrial sites. Not all of these are large sites. The leaders of these industrial sectors are Chemical Processing, Refining, Commercial/Industrial, Pulp & Paper, and Food & Beverage. There are also subsectors that include health care, colleges and universities, and government and military locations. These facilities range from a very small 10 to 50 kilowatts (kW) to larger than 153 megawatts (MW) in capacity. The larger plants, such as those more than 100 MW, are generally installed at large industrial undertakings such as refineries and chemical processing plants. Hospitals, colleges and universities, and military bases often use ranges between seven and 20 MW.

Industrial Info estimates that there is another five to 10 gigawatts of generation in development within the industrial onsite and CHP sectors in the U.S. that will start construction in the next five to seven years, if the economic and environmental climate continues as it is. Industrial Info is tracking an installed capacity of 29 GW of power generation either being utilized for onsite power or CHP applications.

Click on the image at right for a breakdown of pre-commissioned CHP units and megawatts being tracked by Industrial Info in the U.S.

These units use various types of technology, but most often conventional steam turbine and boiler packages, combined-cycle power packages, and combustion turbine packages. With recent environmental regulations, the majority of these sites are fueled by natural gas, but fuel sources such as coal, biomass, and waste are used as well, depending on the regional market areas.

CHP facilities represent about 15% of electrical generation in this country. Some projections indicate roughly 220 gigawatts (GW) of generating capacity through 2030. However, this depends on several factors, such as environmental regulations, energy demand and costs. The average cost of a medium-range CHP facility can run about $1.2 million to $3 million per megawatt to construct, depending on the technology used.

CHP project spending in the lower range is being driven by another trend we are seeing throughout the world: microgrid systems. CHP technologies are expected to be one of the cornerstones of microgrid projects. With onsite power demands and district heating projects, the CHP market is expected to be a major player for the next five to six years at least.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.