include the Green Communities Act in
Massachusetts that provides alternative
energy credits for both heat and power
from CHP and the Renewable Portfolio
Standard in Michigan that considers
waste-to-energy as eligible for renewable
energy credits.
As we go to press, another enlightened state policy has been introduced in
the State Senate of Ohio. S.B. 242 would
include thermal energy as qualifying in a
Renewable Portfolio Standard (RPS), noting that “Renewable energy resources do
not have to be converted to electricity for
purposes of receiving renewable energy
credits. The rules shall specify the quantity
of energy derived from a renewable energy resource that is equal to one megawatt-hour of electricity, including that one
megawatt-hour equals 3,412,142 British
thermal units….” IDEA has long argued
that renewable energy need not be
confined to electricity to achieve environmental benefits. Consider the lake source
cooling systems at Cornell University or
Enwave in Toronto that displace multiple
megawatts of peak power demand from
the grid from wholly renewable cold
lake water. Under electric-only portfolio
standards, neither system is treated as
renewable because they displace power
but do not create it. This is an absurd
policy gap on its face. A dose of common sense such as S.B. 242 will treat
thermal energy equivalent to electricity
and therefore unleash real opportunities for community-scale investments to
enhance energy security through economically competitive and environmentally sound district energy systems.
When you consider that waste heat
from power plants has already incurred
emissions and that recycling that heat
effectively offsets other forms of fuel combustion, what is needed are more enlightened policies that value surplus heat and
regulations that more effectively reward
generation efficiency. The old approach
to rewarding utility additions to rate base,
irrespective of efficiency or reliability, seems
as old-fashioned as the rotary phone. To
unleash infrastructure investment and galvanize public-private partnerships, attaching value to waste heat through emissions
allowances or portfolio standards will be a
very effective energy policy.
Many countries have recognized
the opportunities in recovering waste
heat and have implemented policies to
deploy district energy and CHP. We are
well-acquainted with Denmark’s 40 years
of successful national and municipal
policies that drove robust investment in
district energy. Today, Denmark is widely
acknowledged as a global leader in clean
energy and – with its extensive district
heating backbones – is positioned to
achieve a carbon-neutral economy by
2050. In 2009, Germany passed a CHP
law to emphasize recovery of surplus
heat, to favor CHP generation in the
power market and to convert CHP facilities to lower-carbon sources such as biomass, geothermal and wood waste. The
citizens of Germany have soundly voted
to discontinue reliance on nuclear energy,
choosing instead to invest in cleaner local
resources like district energy and CHP to
meet up to 25 percent of national electricity needs by 2030. Germany currently has
over 100,000 km of district heating piping networks and in 2010 implemented
a renewable energy heat law that favors
investment in community-scale biomass
and biogas. The German Bundestag recognizes that district energy will be a critical resource and the industry is gearing up
to double its market share over the next
12 years.
From my perspective, the
ripest low-hanging fruit is
the potential to add CHP to
existing thermal-only district
energy systems.
From my perspective, the ripest low-
hanging fruit in the U.S. is the potential
to add CHP (cogeneration) to existing
thermal-only district energy systems. By
aggregating the thermal requirements of
multiple (or even hundreds of) buildings
totaling millions of square feet, district
energy systems deliver economies of ther-
mal scale that make CHP highly efficient
and cost-effective. There are hundreds of
district energy networks in all 50 states
that are ready for such updating. Two
recent cases in Texas demonstrate the
outstanding economics of coupling CHP
with mature district heating and cooling
networks. In 2010, Thermal Energy Corp.
(TECO) in Houston installed 48 MW of
cogeneration capacity to enhance reli-
ability, increase efficiency and expand
capacity for the Texas Medical Center, the
largest healthcare campus in the world. In
August 2011, after one full year of CHP
operations, TECO had realized even bet-
ter-than-expected operational efficiency,
resulting in savings to customers of over
$9 million for steam and chilled water
services. Texas A&M University installed a
50 MW CHP unit that commenced opera-
tions in August 2011 during a period of
record summer heat waves and exorbi-
tant ERCOT peak power prices. In the
first week alone, Texas A&M saved over
$250,000; for the month of August, the
savings exceeded $1 million. Combined,
these two CHP investments are projected
to save over $400 million for their cus-
tomers over the next 15 years. Now we’re
talking about smart grids.
Robert P. Thornton
President & CEO
rob.idea@districtenergy.org
© 2012 International District Energy Association. ALL RIGHTS RESERVED.
