States Ramp Up Support for High-Efficiency Power Systems: Combined Heat and Power Gains Ground

October 22, 2003

Washington, D.C. — Two-thirds of the energy that feeds conventional power plants is wasted heat. Combined heat and power (CHP) systems can cut this energy waste in half by using both the electric power and the heat output. Several states, seeking to reduce power prices, improve the reliability of the power grid, and reduce air pollution, have developed policies to encourage CHP. The American Council for an Energy-Efficient Economy today released an updated review of these policies in a new report, State Opportunities for Action: Update of States' Combined Heat and Power Activities. An update of a 2002 ACEEE study, this report highlights new state activities supporting CHP, including interconnection standards, emissions regulations, and financial incentives.

"In the past year, many states have picked up the CHP policy torch and run with it," said Elizabeth Brown, co-author and ACEEE's Industry Research Assistant. "With rising concern over the availability and price of natural gas, CHP is an increasingly viable long-term power production option that is being considered at the state level. Soon-to-be-released analysis by the U.S. Combined Heat and Power Association indicates the CHP can reduce demand for natural gas through greater efficiency." States have the ability to tailor incentive programs to their specific needs, giving their programs a better chance of success. While not all programs will transfer across state boundaries, they provide useful examples from which other states can work.

CHP systems, sometimes known as cogeneration, generate electricity and thermal energy in a single, integrated system. These systems are more energy efficient than separate generation of electricity and thermal energy because heat normally wasted in conventional power generation is recovered as useful energy for thermal demand such as steam, process heat, or space heating and cooling. CHP systems can be employed in many commercial, institutional, and industrial facilities.

State Opportunities for Action: Update of States' Combined Heat and Power State Activities (by Elizabeth Brown and R. Neal Elliott) is available for free at

For further information, contact:

ACEEE Publications

1001 Connecticut Avenue, NW, Suite 801

Washington, DC 20036-5525

Phone: 202-429-0063 Fax: 202-429-0193