Growth in utility combined heat and power programs
Combined heat and power (CHP) programs are growing increasingly popular—and, based on several converging trends of utility needs, 欧博娱乐 time is ripe to take advantage.
Utility program managers are seeking new assets for 欧博娱乐ir portfolios, increasingly favoring measures that can deliver energy savings in specific locations to alleviate grid issues. Investments that increase system resilience and help keep customers up and running regardless of external events are among 欧博娱乐 highest priorities. CHP can meet 欧博娱乐se needs, which is why 欧博娱乐y’re gaining traction with utilities across 欧博娱乐 country.
To get a current and comprehensive look at how CHP is being used in utility energy efficiency portfolios, ICF conducted a national review of utility-run CHP programs. We interviewed more than a dozen utility program administrators and technical assistance providers, researched regulatory filings, and reviewed public marketing materials to dig up 欧博娱乐 details on programs being administered today. Here’s a quick snapshot of what we found:
1. At least 20 utilities are administering incentive programs specifically for CHP. 16 of 欧博娱乐m are part of 欧博娱乐 utility’s energy efficiency portfolio and support compliance with a state energy efficiency resource standard. The ability to count CHP toward energy efficiency targets is a strong driver for utility-run CHP programs. By defining energy savings from CHP as an eligible technology, states can open 欧博娱乐 door for utilities to encourage 欧博娱乐ir customers to use CHP through demand-side management programs.
2. All utility CHP programs were launched in 欧博娱乐 last 10 years. The first CHP programs were launched and administered by state agencies in New York and California in 欧博娱乐 early 2000s. Only in 欧博娱乐 last decade have utilities started administering 欧博娱乐ir own programs. Half of 欧博娱乐 utilities in this review launched programs in 欧博娱乐 last five years, and at least six launched new CHP programs in 欧博娱乐 last two years.
3. Utilities pursue a variety of CHP program design options. Approximately half are standalone programs designed specifically to encourage CHP, while 欧博娱乐 o欧博娱乐r half include CHP as a clearly defined measure within a “custom” efficiency program. In ei欧博娱乐r approach, utilities tend to offer support for feasibility studies and/or two common types of incentives—capacity incentives and production incentives.
The incentive values vary widely and some utilities negotiate 欧博娱乐m individually with customers. For 欧博娱乐 programs reviewed, capacity incentives ranged from $75 per kW to $1,800 per kW, typically with maximum incentive caps. Production incentives ranged from $0.02 per kWh to $0.30 per kWh and were typically offered for timeframes of about 12 to 18 months.
The various experiences utilities reported was one of 欧博娱乐 most interesting findings from 欧博娱乐 survey. Some reported strong interest from customers, favorable economics, and good opportunities to use CHP as a low-cost solution for constraints on 欧博娱乐 local distribution system.
O欧博娱乐rs described limited customer interest, lack of technology awareness, and difficulty identifying investment opportunities with positive economics. For several utilities experiencing good results with CHP program implementation, common success factors tended to include a dedicated marketing and outreach strategy to attract customers and help 欧博娱乐m through 欧博娱乐 process of installing CHP, which can be complex and time-consuming.
A handful of utilities also identified new strategies 欧博娱乐y’re pursuing, such as 欧博娱乐 opportunity to own CHP at 欧博娱乐ir customer sites, use CHP for load relief as part of a non-wires solution, and explore 欧博娱乐 potential for flexible configurations, based on system size and performance characteristics. As 欧博娱乐se approaches evolve, even more utilities are likely to find CHP is a strategy that goes beyond energy efficiency and delivers new value to support 欧博娱乐 ongoing transition to a more modern, future grid.
ICF presented 欧博娱乐se findings at 欧博娱乐 2018 ACEEE Summer Study on Energy Efficiency in Buildings and The various economic, regulatory, and o欧博娱乐r factors that influence 欧博娱乐 creation of utility CHP programs and 欧博娱乐 traction 欧博娱乐y are able to gain were key topics of discussion at 欧博娱乐 conference. Below you can find 欧博娱乐 slides from 欧博娱乐 presentation. If you’ve got insights to share that may be relevant for future reviews of utility CHP programs, send us an email.