As Michigan policymakers consider implementing a robust integrated resource planning (IRP) process for forecasting energy supply and demand – or an integrated distribution planning (IDP) process that recognizes the accelerating deployment of distributed energy resources (DERs) and the economic benefits of demand-side energy efficiency programs (more on this from 5 Lakes Energy coming soon), attention should be paid to the many direct benefits to Michigan’s power system that combined heat & power (CHP) can provide.
Combined heat & power (CHP), also referred to as cogeneration, is the most efficient way to produce and utilize energy. Using one power system to generate both electricity and heat from a single fuel source greatly increases the overall efficiency of the system. CHP power systems may reach energy efficiencies of 80 percent or more while the average efficiency of power generation has remained at 34 percent since the 1960’s. As Governor Snyder emphasizes the importance of eliminating energy waste, CHP is a valuable addition to the crucial demand-side programs. Furthermore, CHP systems lower the cost of energy, allowing energy savings to be invested for other purposes and boosting the productivity and competitiveness of Michigan businesses.
Additionally, when CHP is used in distributed applications, it can balance loads and provide demand response capabilities and ancillary services. CHP can also serve as the anchoring technology for next-generation micro-grid systems that will improve reliability, grid resiliency and enhance power quality.
Using fossil fuels more efficiently means CHP systems have fewer greenhouse gas emissions per unit of energy produced. Consequently, CHP can help Michigan meet the requirements of the U.S. EPA’s Clean Power Plan compliance rules. CHP systems are eligible for Output Based Regulation, a process- based system of determining allowable emissions levels based on the amount of emissions per unit of energy output. Because of this regulatory flexibility, CHP can afford industrial facilities more flexibility in meeting air quality emission standards.
From Governor Snyder’s call to eliminate energy waste, to the EPA’s plan to reduce carbon emissions, a focus on efficient power generation, through the use of CHP, has wide appeal. This is an old technology that is seeing new life in view of these emerging policy and regulatory realities, and with its historically strong industrial base, Michigan is well-positioned to optimize this CHP opportunity.
To learn more about the benefits of CHP and policy obstacles/opportunities, please join us on Thursday, April 30 at the Lansing Radisson for the 2015 Michigan CHP Conference, co-hosted by the Michigan Energy Innovation Business Council (Mi-EIBC) and Oakland University. To register, click here. For information on sponsoring the conference, please contact Jamie Scripps at jscripps@5lakesenergytest.flywheelsites.com.
Posted by Jamie Scripps, Principal, 5 Lakes Energy
April 2, 2015
