Combined Heat and Power: Effective Energy Solutions for a Sustainable Future

Combined Heat and Power (CHP) solutions represent a proven and effective near-term energy option to help the United States enhance energy efficiency, ensure environmental quality, promote economic growth, and foster a robust energy infrastructure. Using CHP today, the United States already avoids more than 1.9 Quadrillion British thermal units (Quads) of fuel consumption and 248 million metric tons of carbon dioxide (CO{sub 2}) emissions annually compared to traditional separate production of electricity and thermal energy. This CO{sub 2} reduction is the equivalent of removing more than 45 million cars from the road. In addition, CHP is one of the few options in the portfolio of energy alternatives that combines environmental effectiveness with economic viability and improved competitiveness. This report describes in detail the four key areas where CHP has proven its effectiveness and holds promise for the future as an: (1) Environmental Solution: Significantly reducing CO{sub 2} emissions through greater energy efficiency; (2) Competitive Business Solution: Increasing efficiency, reducing business costs, and creating green-collar jobs; (3) Local Energy Solution: Deployable throughout the US; and (4) Infrastructure Modernization Solution: Relieving grid congestion and improving energy security. CHP should be one of the first technologies deployed for near-term carbon reductions. The cost-effectiveness and near-term viability of widespread CHP deployment place the technology at the forefront of practical alternative energy solutions such as wind, solar, clean coal, biofuels, and nuclear power. Clear synergies exist between CHP and most other technologies that dominate the energy and environmental policy dialogue in the country today. As the Nation transforms how it produces, transports, and uses the many forms of energy, it must seize the clear opportunity afforded by CHP in terms of climate change, economic competitiveness, energy security, and infrastructure modernization. The energy efficiency benefits of CHP offer significant, realistic solutions to near- and long-term energy issues facing the Nation. With growing demand for energy, tight supply options, and increasing environmental constraints, extracting the maximum output from primary fuel sources through efficiency is critical to sustained economic development and environmental stewardship. Investment in CHP would stimulate the creation of new 'green-collar' jobs, modernize aging energy infrastructure, and protect and enhance the competitiveness of US manufacturing industries. The complementary roles of energy efficiency, renewable energy, and responsible use of traditional energy supplies must be recognized. CHP's proven performance and potential for wider use are evidence of its near-term applicability and, with technological improvements and further elimination of market barriers, of its longer term promise to address the country's most important energy and environmental needs. A strategic approach is needed to encourage CHP where it can be applied today and address the regulatory and technical challenges preventing its long-term viability. Experience in the United States and other countries shows that a balanced set of policies, incentives, business models, and investments can stimulate sustained CHP growth and allow all stakeholders to reap its many well-documented benefits.