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September 04, 2012
White House extols CHP

               In a new Executive Order (EO), President Obama directed federal agencies to take nonregulatory steps to promote energy efficiency and particularly the use of combined heat and power (CHP) in U.S. industry. 
Avenues listed in the EO to propel the initiative include encouraging adoption of investment models and state best practices policies; providing technical assistance to states and manufacturers to encourage investment; publicizing information on the associated benefits; and using existing federal authorities, programs, and policies.
Double benefit
“CHP” is commonly defined as the concurrent production of electricity or mechanical power and useful thermal energy (heating and/or cooling) from a single source of energy.  “Instead of burning fuel in an on-site boiler to produce thermal energy and also purchasing electricity from the grid, a manufacturing facility can use a CHP system to provide both types of energy in one energy-efficient step,” notes the EO.
               Despite these benefits, independent studies have pointed to underinvestment in industrial energy efficiency and CHP as a result of many barriers, including uncertainty about the effectiveness of new technologies; complexity of implementation projects; permitting requirements; inadequate state procedures to expedite grid integration; and lack of knowledge about the payback period.
40 GW goal
               The EO directs the Departments of Energy, Commerce, and Agriculture and the EPA to work with the Council on Environmental Quality and other federal economic and technology offices “to coordinate and strongly encourage” efforts to achieve a national goal of deploying 40 gigawatts of new, cost-effective industrial CHP in the United States by 2020.
               Specific steps named in the EO to achieve this goal include:

    • Providing assistance to states on accounting for the potential emissions reduction benefits of CHP and other energy efficiency policies when developing state implementation plans (SIPs) to achieve National Ambient Air Quality Standards (NAAQS);
    • Providing incentives for the deployment of CHP and other types of clean energy, such as set-asides under emissions allowance trading program SIPs, grants, and loans;
    • Employing output-based approaches as compliance options in power and industrial sector regulations, as appropriate, to recognize the emissions benefits of highly efficient energy generation technologies like CHP;
    • Seeking to expand participation in and create additional tools to support the Better Buildings, Better Plants program at the Department of Energy, which is working with companies to help them achieve a goal of reducing energy intensity by 25 percent over 10 years, as well as utilizing existing partnership programs to support energy efficiency and CHP;
    • Providing general guidance, technical analysis and information, and financial analysis on the value of investment in industrial energy efficiency and CHP to states, utilities, and owners and operators of industrial facilities; and
    • Improving the usefulness of federal data collection and analysis.

               According to the White House, meeting the 2020 goal would save energy users $10 billion per year, result in $40 billion to $80 billion in new capital investment in manufacturing and other facilities that would create American jobs, and achieving emissions reductions equivalent to taking 25 million cars off the road.
               The EO is at http://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiency.

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