Certification of Combined Heat and Power Systems: Establishing Emissions Standards

Anna Monis Shipley, Nathanael Green, Katie McCormack, Jia Li, and R. Neal Elliott

October 2001

SUMMARY OF KEY RECOMMENDATIONS

Combined heat and power (CHP) is more energy efficient than the separate generation of electricity and thermal energy. CHP systems generate electricity (and/or mechanical energy) and thermal energy in a single, integrated system. Heat that is normally wasted in conventional power generation is recovered as useful energy for satisfying a thermal demand, thus avoiding the losses that would otherwise be incurred from separate generation of power. CHP systems are highly efficient (and thus emit less carbon dioxide [CO2]) and reliable. Modeling analysis has demonstrated that clean CHP technologies have significant air emissions, transmission, and price benefits (Morris 2001). Despite these benefits, CHP remains an underutilized technology hindered by a number of disincentives. According to Elliott and Spurr (1999), the main barriers to the implementation of CHP are:

• complicated permitting systems that are complex, time consuming, and varied;
  
• regulations that do not account accurately for the overall system efficiency of CHP or credit displaced emissions and grid losses;
  
• difficult and frequently prohibitive interconnection arrangements with utilities; and
  
• depreciation schedules that do not reflect the true life of CHP assets.

To encourage the market to recognize the benefits of CHP, we recommend the following measures:

1. Establish output-based regulations-Output-based regulation encourage efficiency;
   
2. Calculate compliance based on displaced emissions- CHP units produce two types of energy, but thoughtful regulations can encourage the most economically and environmentally beneficial configuration for each system .We recommend calculating a CHP unit's compliance with electric emissions rates by subtracting the emissions that would have occurred at a stand-alone boiler;
   
3. Continue a proper accounting for the emissions benefits of CHP beyond 2007 indefinitely;
   
4. Establish efficiency requirements and a timetable for improvement:
   2003: minimum 55% system efficiency
   2008: minimum 60% system efficiency
   2012: minimum 65% system efficiency
5. Establish operational requirements-At least 20% of a system's output should be thermal and at least 20% electrical to ensure that they are proper CHP units; and,
   
6. Ensure that labeling and certification strategies include CHP-All the reasons to develop labeling and certification of other DG technologies also apply to CHP.
   

20 pp., 2001, $11.00, IE014