American Gas - November 2013 - (Page 19)

CoMbInED HEAT AnD powEr Combined heat and power, also known as cogeneration, is an efficient approach to generating electricity and useful thermal energy from a single fuel source at the point of use. Instead of purchasing electricity and then burning fuel in an on-site furnace or boiler to produce thermal energy, a facility can use CHP to provide these energy products in one energy-efficient step. As a result, appropriately sited CHP can provide significant cost savings and environmental advantages over separate heat and power. There is renewed interest in CHP in the United States today. Some of the major drivers for growth of natural gas-based CHP are the advantageous price outlook for natural gas, and state and federal incentives (more than 20 states recognize CHP as part of their renewable or alternative energy, or energy-efficiency portfolio standards). Natural gas is the fuel of choice for existing CHP and has great potential for serving the nation in the future. In August 2012, President Obama issued an executive order targeting an additional 40 GW of new capacity of CHP by 2020. For CHP to grow, regulatory and policy changes are likely to be necessary, US CHP CAPACITY BY TECHNOLOGY (81,800 MW) Combustion Turbine Recip Engine 3% 13% Waste Heat Recovery COGENERATION 1% Less Waste Combined Cycle Fuel Input Source: ICF Boiler/Steam Turbine 34% 50% COMBINED HEAT & POWER (CHP) particularly at the state level. It is important for all policy makers to recognize that there are many policies in place today that may have the unintended effect of biasing outcomes against CHP in favor of renewables or other technologies, despite the capability of CHP to deliver on the same environmental and energy security objectives. Particularly for small-scale CHP installations, new business models are likely to be required to better align the interests of customers, regulators, energy suppliers, and manufacturers and distributors of CHP technology. In Figures equal more than 100% due to rounding. response to these needs, some CHP manufacturers and suppliers, or other actors, may wish to act as financing intermediaries and choose to own and operate CHP equipment, as well as selling power, heat, and steam at a discount to retail rates to the end user over a long contract period. Allowing CHP into the rate base for LDCs may be a workable solution in some jurisdictions, using new structures that could be devised to guard against stranded costs for LDCs while also attracting new capital for CHP investments. fuelIng chp: nEw busInEss MoDELs ArE LIkELy To bE rEquIrED To bETTEr ALIgn THE InTErEsTs of CusToMErs, rEguLATors, suppLIErs, MAnufACTurErs, AnD DIsTrIbuTors. november 2013 AmericAn GAs 19

Table of Contents for the Digital Edition of American Gas - November 2013

American Gas - November 2013
Contents
President’s Message
Subject Index
Head Start: On Energy Education
Digest
Issues
Updates
By the Numbers
Need to Know
Places
The Wheels on the Bus...
California
Michigan
Michigan
New Jersey
Long Island
Fueling the Future
U.S. Secretary of Energy Ernest Moniz
A Tight Ship
Expanding the Reach of the Gas Infrastructure
Company Profiles
Jobs
Marketplace
Headway

American Gas - November 2013