CHP as a Greenhouse Gas Reduction Strategy

1. CHP as a Greenhouse Gas Reduction Strategy CHP/DG and Emerging Fuels June 26, 2007 Tom Frankiewicz, EPA CHP Partnership

2. Overview • Benefits of CHP • efficiency and environmental benefits • as part of GHG strategy • Recognizing environmental benefits • Monetizing environmental benefits • Resources through the CHP Partnership and EPA

3. Advantages of Combined Heat and Power (CHP) Reducing fuel use • More efficient than separate generation of electricity and heat. • Lower operating cost. Higher efficiency translates to reduced fuel consumption. • Reduces emissions of all pollutants. Renewably-fueled CHP is CO2 neutral. • Increased reliability and power quality also adds significant value. Reducing O&M, Fuel Monetizing Environmental Benefit Avoiding Business Disruptions

4. Efficiency Advantages of CHP

5. Criteria and GHG Reductions • Efficiency gains translate to emission reductions: • SO2 • NOx • Commensurate greenhouse gas reductions.

6. Greenhouse Gas Benefits of CHP- CO2

7. Recognizing Environmental Benefit • Key to encouraging CHP-DG is in recognizing it’s primary benefits: • Higher efficiency • Onsite thermal and electrical generation (avoid transmission & distribution losses) • State-of-the-art technology (emission offsets) • CHP can be most (cost) effectively installed during new build or boiler replacement/equipment upgrade.

8. CHP as GHG Strategy • Efficiency • Can be Renewable Energy Measure • Works in conjunction with other measures (efficiency, onsite power generation, renewable energy purchases) • Recognized in USGBC LEED certification • Strategy under voluntary commitments

9. Benefits of Clean Energy (EE, RE, and DG) • Economic • Lower cost compared to new generation and transmission • Downward pressure on natural gas prices • Lower wholesale electricity prices • Improved local economy • Improved service to low income and seniors • Risk Management • Diversify a utility’s generation supply portfolio • Reduce environmental regulatory risk to utilities • Environmental • Lower greenhouse gas emissions and air pollutants • Lower water use • Utility System Benefits • Quick fix with longer term benefits • Improved security of electricity and gas systems • Lower peak demand / improved reliability • “Clean Energy” includes cost-effective energy efficiency (EE), renewable energy (RE), and clean distributed generation (DG) such as combined heat and power (CHP).

10. Environmental Revenue Streams Definition: Any number of programs that reward clean power generation and provide one time or ongoing revenue source. Emissions Programs • Emission allowance trading programs (cap and trade) • New source emission offset programs • CO2 offset programs Generation Programs • Energy portfolio standard programs • Voluntary green power purchases

11. Procurement Guide CHP Emissions Calculator Funding Database Project Resources

12. The EPA CHP Partnership • Voluntary program - seek to reduce the environmental impact of power generation by promoting the use of CHP. • Actively providing education/outreach and direct project assistance since 2001. • Provide services and tools for Partners to assist with CHP project development, regulatory barriers, market transformation. • Work with government and environmental community to evaluate environmental benefits of CHP.

13. Resources for Greenhouse Gas Strategy

14. CHP Partnership Tom Frankiewicz frankiewicz.thomas@epa.gov 202.343.9794 Or visit our website at www.epa.gov/chp