District Energy - 2009 4th Quarter

definition of “combined heat and power system” constrains complying CHP systems to those with a low amount of net sales of electricity, and the ACELA contains no definition of CHP systems at all.

The primary criterion should be energy efficiency, not size or sales. Accordingly, we recommend using a threshold criterion for CHP that is the same as we recommend for the cap-and-trade legislation.

Funding Support for District Energy and CHP

Senators Bernie Sanders, I-Vt., and Jeff Merkley, D-Ore., have introduced the Thermal Energy Efficiency Act (S.1621), which would dedicate 2 percent of revenues from cap-and-trade legislation in the form of an allowance set-aside to fund district energy and CHP systems. As a result of advocacy of S.1621, the recently released version of the Senate climate change bill (the Senate Environment and Public Works Committee’s “Chairman’s

It’s time IDEA

Mark”) would dedicate 10 percent of State Energy and Environment Development program funding from emissions allowance revenue generated by cap-and-trade legislation in the form of an allowance set-aside to fund district energy and CHP systems. Based on various estimates, this could create funding of approximately $150 million per year for clean energy infrastructure. IDEA strongly supports S.1621, and we encourage more extensive incorporation of its provisions into the final climate change legislation.

Efficiency and Renewables Programs

Both the House and Senate climate bills, as well ACELA and other energy policy legislation, contain numerous provisions aimed at promoting and creating incentives for energy efficiency activities. Yet, a large number of those provisions inexplicably omit CHP and district energy systems, notwithstanding the enormous contribution such facilities can make to energy

savings. IDEA has proposed a series of amendments to both bills that would incorporate CHP and district energy systems into the relevant provisions. If accepted, these amendments should help ensure that district energy can continue to make further contributions to reduce CO2 emissions.

Mark Spurr is legislative
director of IDEA. He also is
president of FVB Energy Inc.,
a U.S. consulting firm special-
izing in district energy and
CHP business development,
engineering and marketing,
with offices in Minneapolis,
Minn., and Bahrain. In addition, FVB has
offices in Edmonton, Toronto and Vancouver,
Canada; and in Stockholm, Västerås and other
cities in Sweden. Spurr represents the United
States on the executive committee of the
International Energy Agency Implementing
Agreement on District Heating and Cooling,
including Implementation of CHP. He may be
reached at mspurr@fvbenergy.com.

to answer the call.

As you know, district energy is about aggregating thermal loads to achieve economies of scale. The same applies to fund-raising for lobbying activities. We need to aggregate the resources of all IDEA members to achieve the scale needed for an effective lobbying campaign in Washington, D.C., and we are asking for your contribution today.

Federal energy and climate change legislation is being written that will have a profound impact on our industry. IDEA needs dedicated resources for advocacy efforts to ensure the legislation fairly treats district energy and CHP.

Our current advocacy efforts on federal climate legislation are focused on an important emissions allowance exemption for CHP district energy systems and on the Thermal Energy Efficiency Act, which will direct 10 percent of State Energy and Environment Development emissions allowance revenue (approx. $150 million per year) to fund district energy deployment.

If successful, these two measures alone could financially benefit all IDEA members – from consultants to suppliers to operators. However, we have now reached a critical juncture making it essential that we garner additional financial resources to continue advocacy at an effective level.

Please answer the call with a robust pledge. If each IDEA member does his or her part, we will all be better for it. As Benjamin Franklin said when signing the Declaration of Independence, “We must all hang together or most assuredly, we will all hang separately.”