Inclusion in Demand Side Management
As an efficiency technology, CHP lowers demand on the electricity delivery system, frequently reduces reliance on traditional energy supplies, makes businesses more competitive by lowering their costs, reduces greenhouse gas and criteria pollutant emissions, and refocuses infrastructure investments towards a next-generation energy system. (Read more about these benefits here.) These benefits correspond with many of the same reasons state pursue demand-side management (DSM).
The net energy savings from CHP (once the additional fuel input is netted out) are akin to the energy savings from a lighting project, a motor upgrade, an industrial process improvement, or other traditional end-use efficiency measures. However, CHP is often overlooked in DSM programs or ineligible for custom incentives. The U.S. DOE Southwest CHP Technical Assistance Partnership is available to provide information on how other states and utilities calculate the energy savings from CHP. Although CHP systems consume additional fuel onsite, less fuel is burned at the utility power plant to supply that same load, and less total electrical and thermal losses occur. Waste heat recovery systems use no extra fuel and thus represent 100% energy savings.
Options and Examples of CHP in Utility Efficiency Programs in Other States