Rethinking the Benefits of CHP

In recent years there has been great deal of effort made in promoting combined heat and power (CHP) and its related economic and environmental benefits. Much of this effort has been targeted at industries because they are generally the best suited to host a CHP system. In spite of the efforts and the assistance available, many industries do not seem overly enthusiastic about installing CHP. The primary reason appears to be that electric rates are low relative to typically used fuels such as natural gas. This translates into a longer return on investment than most companies can justify in the face of competing internal pressures. Trying to encourage industries to install CHP in a struggling economy is just that much more difficult. When CHP is installed, there is usually another motivating factor such as a “free” fuel or concerns about power reliability. Does this mean that CHP is not the great solution everyone has been talking about? The author does not believe so. However, maybe it is time to redefine the application of CHP by simply reconsidering the boundary under which it is typically applied. For example, by considering CHP at a State boundary as opposed to a facility boundary, CHP takes on an entirely new role. Expanded benefits can now include economic development, homeland security, environmental sustainability, improved power transmission and distribution and job creation.