Meeting #29: Combined Heat & Power
Tuesday, August 20, 2013
10:00am – 3:15pm ET
Federal Energy Regulatory Commission, Washington, DC
This meeting was the first of several MADRI meetings focused on the question, “What needs to be done to make distributed generation (DG) more accessible to end-use customers while balancing the interests of all stakeholders?” The goal of this series was to determine whether MADRI participants can agree to consensus recommendations related to any of several DG policy or ratemaking topics. The meeting focused on combined heat and power (CHP) systems. In the first panel, we explored currently available CHP technologies, and examined how they can provide benefits in terms of cost and reliability not just for the DG owner but also for the utility system. The second panel discussed how tariff and ratemaking issues can dramatically affect the economic viability of CHP systems. The third and final panel considered some of the non-tariff incentives that federal and state governments have provided for CHP, and how effective those incentives have been.
CHP Technologies and System Benefits
Richard Sweetser, Mid-Atlantic Clean Energy Application Center
Gearoid Foley, Mid-Atlantic Clean Energy Application Center
Neal Elliot, ACEEE
Traditionally, CHP systems have been the purview of very large industrial customers that have a 24/7 need for large amounts of electric energy and process steam, and much of the policy attention has focused on those customers. That is changing. CHP systems are increasingly of interest to large commercial and institutional customers, who in addition to electric energy needs have building heating and cooling needs. In this panel, we will hear from national and regional experts about the current generation of CHP technologies and their potential applications. We will also explore how those technologies can result in costs and benefits not just for the owner, but also for the utility system.
There are a variety of issues related to utility ratemaking and utility tariffs that fundamentally and profoundly affect the economic viability of CHP deployment in a competitive market like PJM’s. In this panel, we will explore some of those ratemaking and tariff issues, including standby rates, peak load contribution, load factor adjustments, and power factor adjustments. We will hear from experts on how tariffs can make or break a CHP project, why they are structured as they currently are, and what the impact would be on other stakeholders if the rates and tariffs were made more favorable for CHP.
The federal government, as well as many state governments and individual utilities, have experimented with a variety of policies that provide incentives for CHP deployment. This panel will summarize some of the types of incentives that have been offered and how effective they have been.