What is combined heat & power & why does Obama like it?

President Obama signed an executive order on Thursday that seeks to boost the energy efficiency of the industrial sector by implementing a technology called combined heat and power or (CHP). Great, so WTH is CHP?

Combined heat and power or cogeneration is the simultaneous creation of both electricity and heat from a single fuel source like natural gas, biomass, coal, or oil. The concept has been around for over a century and cogeneration systems are inherently more efficient than the act of separately generating electricity from power plants and heat from heating equipment.

Combined heat and power can be delivered on both a small scale — like a residential house using a fuel cell for electricity and heat. Or on a much larger scale, like an industrial district heating project, which generates both electricity and steam or hot water in a central facility and pipes that hot water to a network of nearby buildings where it is used for space and water heating.

Because CHP is more energy efficient, it reduces potential greenhouse gas emissions, and also cuts energy costs for companies. A couple years ago a study came out from Oak Ridge National Labs that found that boosting the use of combined heat and power to 20 percent of the generating capacity of the U.S. by 2030 would save 5.3 quadrillion thermal units of fuel per year, which is equal to almost half the total energy consumed by U.S. households. That much CHP could also lead to a 60 percent reduction of carbon emissions, which is the equivalent of taking 154 million cars off the road.

Obama wants to encourage the creation of combined heat and power for the industrial sector — picture facilities like paper making factories, and aluminum smelters — and is calling for the creation of 40 GW of new combined heat and power facilities by 2020. That, quite simply, is pretty huge.

Obama wants to encourage the creation of these systems by offering support to states who want to build CHP, and offering incentives to companies that install CHP. Obama also calls for the Department of Energy, Commerce, Agriculture and the Environmental Protection Agency to convene workshops and research on the subject, and also is looking at ways to encourage the private sector to invest in these projects.

At the end of the day, it may be the really boring stuff — uh, industrial energy efficiency — that does the most good and needs the most support.

Image courtesy of Bilfinger Berger Group.