Despite Opportunities, Tennessee Lags in Combined Heat & Power Implementation

Washington, D.C. (September 28, 2011): The combined heat and power (CHP) market is growing unevenly in different states, and will require more efforts than just supportive policies to achieve greater deployment, according to a new report released today by the American Council for an Energy-Efficient Economy (ACEEE). The report, Challenges Facing Combined Heat and Power Today: A State-by-State Assessment, profiles CHP markets in each state and identifies which elements of the market are encouraging or discouraging CHP developers today.

CHP, sometimes known as cogeneration, is an important energy resource that produces electricity and thermal energy at the same time from a single fuel input and provides highly efficient energy by maximizing the energy value of a variety of fuels. CHP can produce energy twice as efficiently as standard centralized energy generation. The Department of Energy reports that CHP has been cleanly and quietly providing over 12% of U.S. electricity generation. Since 2005, over 1700 MW of capacity has been added due to new CHP system deployment, but that deployment has been unevenly distributed around the country.

"CHP markets differ considerably among states," said Anna Chittum, ACEEE Senior Policy Analyst and lead author. "This report shows that building a favorable CHP market requires more than just good policies, such as interconnection standards and tax incentives. The current economic recession and missing access to retail power markets continue to negatively impact CHP markets in many states, and prevent CHP from reaching its full potential around the country."

TENNESSEE: While there are many opportunities for successful CHP applications in Tennessee's industrial sector, the state has seen relatively little traction in this area, with zero new CHP installations occuring between 2005-2010. Tennessee ranks 45th in terms of New CHP Sites and CHP Capacity. However, with funding from the Pathway Lending Energy Efficiency Loan Program and federal and state incentives, the barriers to these programs are lowered. Co-generation projects typically have the quickest repayment periods and will benefit businesses for many years following implementation.

"CHP represents an important energy resource that could meet a significant portion of projected needs for new electricity generation investments over the coming decade," said Dr. Neal Elliott, ACEEE Associate Director for Research and author of the recent white paper Avoiding a Train Wreck: Replacing Old Coal Plants with Energy Efficiency. "This report identifies areas that each state and the country as a whole must work on to better encourage CHP so that we can realize the full benefits of this resource."

To learn more about CHP and your business, contact Pathway Lending @ info@pathwaylending.org or 615-425-7171.