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«Quadrennial Technology Review 2015 Chapter 6: Innovating Clean Energy Technologies in Advanced Manufacturing Technology Assessments Additive ...»

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CHP capacity growth has been slow since the early 2000s; however, 2012 had the most new installed capacity since 2005, with 955 MW of installed CHP capacity added (see Figure 6.D.4).18 Interest in CHP in the United States is rising primarily owing to growth in U.S. manufacturing19 and growing awareness of the value of energy resiliency. This can also be seen in Figure 6.D.4, where a considerable increase in CHP deployment is expected in 2015 and 2016.

Figure 6.D.4 Annual U.S. CHP Capacity Additions20

In the United States, the greatest use of CHP in terms of capacity is in the industrial sector, which accounts for approximately 86% of the CHP capacity (see Figure 6.D.5). CHP has traditionally been deployed most frequently in the manufacturing and commercial/institutional markets. These traditional applications typically enjoy an energy use profile with high thermal demands relative to electrical demands, making them an attractive match for traditional CHP. As shown in Figure 6.D.5, CHP can be very cost-effective for large, thermally driven applications typical in paper and chemical manufacturing and petroleum refining.

6 Quadrennial Technology Review 2015 TA 6.D: Combined Heat and Power Figure 6.D.

5 Existing CHP Capacity in the United States by Sector21 Applications with CHP Opportunities Significant opportunities remain to improve performance and efficiency of CHP systems and to reduce costs in smaller size ranges, typically under 5 MW. CHP research and development (R&D) will continue to focus on technologies benefiting industrial, large-scale residential, and commercial/institutional facilities. The focus of these activities will shift to address the needs of those markets where large CHP potential exists but has been untapped; namely, 1–5 MW scale CHP systems with higher power to heat ( ) ratios. Standardized, “package” systems for commercial buildings with similar characteristics, such as hospitality and hospitals, are under review and consideration. To more effectively deploy CHP into underserved markets, the following areas have been identified.

Single Buildings/Facilities Figure 6.D.

6 shows existing CHP capacity compared to the total technical potential in a variety of industries and sectors. There still remains significant untapped potential in all market sectors. CHP systems are typically custom-designed and installed. This makes sense in the industrial sector, where many larger projects can support site-specific design and construction costs. For single buildings and smaller facilities, on-site engineering and design costs increase hurdles for the end user. R&D activities should continue to focus on cost reductions and efficiency improvements to improve technology deployment in all market areas.

7 Quadrennial Technology Review 2015 TA 6.D: Combined Heat and Power Figure 6.D.

6 Existing CHP versus CHP Technical Potential by Sector22 District Energy with CHP District energy systems typically distribute thermal energy (such as steam, hot water, or chilled water) from a central plant to a number of facilities connected through a pipe distribution system. In a recent analysis, the International District Energy Association (IDEA) has identified 601 district energy systems in the United States, 289 of which were found to not include CHP.23 CHP installed as part of district energy systems has grown in recent years. There is currently 6.6 GW of CHP generating capacity at district energy sites, including 55 city and 153 university campus district energy systems. There are increasing interest and opportunities to deploy CHP in new mixed-use developments and dense urban sites. Owing to their resiliency and reliability benefits, many universities and cities are interested in district energy systems with CHP. Given that district energy systems connect and aggregate sizable thermal loads, which are important to highly efficient CHP, the U.S. district energy sector holds strong potential for CHP deployment.

Microgrids with CHP Federal, state and local public-private partnerships24 can help coordinate and advance the uptake of CHP and are particularly important to encourage the adoption of microgrid technology. Microgrids typically integrate smallscale distributed energy resources into low-voltage electricity systems within clearly defined boundaries that act as a single controllable entity with respect to the grid. One example of federal/state coordination is the transit system in New Jersey, where an agreement was announced in 2013 to develop a microgrid that would help ensure continued operation of the New Jersey Transit rail system after a major disaster, such as Hurricane Sandy.25 In addition, the state of Connecticut established the nation’s first statewide microgrid pilot program in 2013.

8 Quadrennial Technology Review 2015TA 6.D: Combined Heat and Power

Microgrids with CHP offer two primary benefits: (1) assurance that diverse energy supplies will be provided to sites deemed critical for public services or safety even during wide-scale outages or natural disasters; and (2) enhanced reliability and resilience for high-priority sites where outages can cause serious disruptions, risks, or financial costs. Prime candidates for microgrids include hospitals, military bases, police and fire services, and other key government facilities as well as university campuses, schools, and large commercial or industrial facilities that require uninterrupted power supplies.26

Microgrids with CHP may also help enable the following:

Clean energy development: Establishing CHP as an enabler of other intermittent sources such as  renewables, and reducing GHG and other emissions Disruptive technologies and forces: Transformative industry trends that make distributed generation,  energy storage, and energy management technologies more useful and cost-effective for a wider range of applications Facilitation of Cost-Effective CHP While CHP can be a highly effective and efficient electricity and thermal energy generation technology, there still exist significant technical barriers to its adoption. The set of circumstances that would allow CHP to obtain

as much of its technical potential as possible includes the following:

Cost to install and operate CHP technology is less than the cost to purchase electricity and create on site thermal energy separately (from the least expensive U.S. utility plus the most efficient boiler) Efficiency that exceeds the best combination of purchased electricity plus on-site produced thermal  energy (i.e., 75%+,27 a combined efficiency that exceeds current combined efficiency for combined cycle electricity generation and most efficient boiler configurations in most applications) Higher power-to-heat ratios (~1.5) while maintaining cost, performance, and efficiency targets (70%+)28  to allow broader adoption in all end-use sectors Fuel flexibility that allows for a variety of locally produced input fuels (such as municipal waste gases  and solid fuels, biofuels, methane from animal wastes, and digester gases) and also renewable energy sources, such as solar and geothermal energy Reliability, availability, maintainability, and durability that meet and exceed the best comparable  technologies (such as electricity derived from highly efficient central-station combined cycle plants plus thermal energy from the most efficient boilers) Packaging systems into easy-to-select-and-install (plug and play) modules, including standardized  technologies for similar building characteristics Technological advances that enable microgrids with distributed energy resources, including CHP, to  autonomously and safely switch between grid connected and island mode operation.

Technology Assessment and R&D Potential The Department of Energy (DOE) has focused on eliminating the technological and market hurdles to the adoption of CHP technologies through a combination of R&D and technical assistance. CHP has a long history of providing both electricity and thermal energy to cities, manufacturers, and other commercial entities. While the technology and its traditional applications are well understood, there still remains an untapped opportunity for R&D both within and outside of the traditional applications and markets.

Near-Term Opportunities The DOE CHP Technical Assistance Partnerships (CHP TAPs)29 have been working to promote and assist in transforming the market for CHP, district energy with CHP, and waste heat-to-power (WHP) CHP 9 Quadrennial Technology Review 2015 TA 6.D: Combined Heat and Power technologies throughout the United States. The CHP TAPs work closely with end users and other stakeholders to identify opportunities and provide technical assistance. Through this work, DOE has gathered information on many of the near-term barriers to broader implementation of CHP. Most of the near-term research opportunities focus on reducing first cost and simplifying system design and installation for existing traditional markets and applications (typically with power-to-heat ratios under 0.75). The following are five areas where

near-term needs have been identified:

Single buildings/facilities—packaging: Development and demonstration of cost-effective CHP package  systems requiring less on-site engineering and design that would reduce hurdles for the end user District energy with CHP: Development and demonstration of technologies bringing down the first  cost of installed district energy systems with CHP Microgrids with CHP: Development and demonstration of enabling technologies for energy  management, including advanced controls, distributed generation (including renewables), and energy storage Flexible fuel CHP: Development and demonstration of technologies reducing the first cost of fuel  treatment as well as development of corrosion-resistant materials Grid integration—sizing beyond the facility: Development and demonstration of control technologies  that would allow for seamless integration of both local grid and facility cluster operations Long-Term Opportunities Longer-term CHP research will focus on expanding markets and applications for CHP technologies, outside of traditional thermally driven processes and facilities. These activities should focus on improving system efficiencies considering both the first and second laws of thermodynamics. While first-law analysis accounts for conservation of energy flows, second-law analysis addresses the quality of energy utilization. In systems with multiple outputs such as electrical and mechanical power as well as usable heat energy, optimization can be guided by a second-law analysis which considers the maximization of available energy, both in energy inputs such as fuel chemical availability as well as internal energy flows among components. Maximizing generally is a more efficient use of fuel available energy, and flexible systems which can produce higher are desirable.30 Long-term opportunities include the development of even higher electric efficiency CHP systems, highefficiency single and combined cycle prime movers, WHP systems for low-temperature waste heat, and “smart” CHP systems that integrate with the U.S. electric grid. These opportunities are explored in this section. Improvements in low-temperature thermal recovery and prime mover efficiencies will enable CHP to move to higher applications, while smart CHP systems will enable flexibility of use and enhanced revenue opportunities.

Research in these areas can yield fuel and carbon emission reductions as well as open new markets for CHP technologies. The result of these activities will be to make efficient CHP of all ratio ranges cost-competitive with purchased grid electricity.

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