The Pew Charitable Trusts has released a report, titled &ldquo;Distributed Generation: Cleaner, Cheaper, Stronger Industrial Efficiency in the Changing Landscape,&rdquo; that shows how an array of technological, competitive and market forces are changing how the U.S. generates power and the ways that Americans interact with the electric grid. The report also details the impact of national policy on the deployment of clean and efficient energy technologies.
In the report, Pew&rsquo;s clean energy initiative examines the changing electric grid to understand why and how it is evolving.&nbsp; It also looks at industrial energy efficiency technologies, sometimes referred to as cogeneration, and how these systems contribute to a cleaner, more secure and more resilient power system.
As part of the research, Pew commissioned ICF International Inc. to analyze the impact of the Power, Efficiency and Resilience (POWER) Act, an industrial energy efficiency bill introduced in the House and Senate, on future market deployment of combined heat to power (CHP) and waste heat to power (WHP), key distributed technologies used in industrial, institutional or manufacturing facilities.
Some key findings from the report include that there have been 300 grid disturbances in the last three years alone, which costs businesses $150 billion annually; 90 percent of new power capacity since 2000 has come from gas and renewable energy; in the decade from 2003 to 2013, 65 percent of new power plants have become independent power producers; and by 2020, 40 gigawatts (GW) of coal-fired capacity are scheduled for retirement.
The report shared that gas and renewable energy plants account for more than 90 percent of the power capacity added in the U.S. since 2000. The U.S. Energy Information Administration projects that gas and renewables will account for a similar share of capacity to be built between now and 2020.
According to the report, changes in the electric power sector hold great promise for expanded deployment of these technologies in the coming years. The report states that nationwide, more than 83 GW of CHP was deployed at more than 4,400 facilities as of Dec. 31, 2014. This represents 8 percent of the nation&rsquo;s installed power capacity, but because cogeneration systems can operate on a full-time basis, they account for 12 percent of net generation. Installed CHP and WHP in the U.S. have resulted in an estimated energy consumption reduction of 2 quadrillion Btu (2 percent)&mdash;equivalent to nearly 250 million metric tons of carbon dioxide emissions or the annual output of 66 coal-fired power plants.
Natural gas is used as the fuel in 70 percent of CHP installations. In the fourth quarter of 2014 natural gas generated 57,698 MW and biomass generated 2,604 MW. The report discussed financial incentives role in the deployment of CHP. The investment tax credit (ITC) provided under Section 48 of the Internal Revenue Service code has proved to be vital in assisting the solar industry and other clean energy technologies scale up and reduce costs, but since its adoption in 2006, the tax credit has treated CHP and WHP differently than many of these technologies.
The example provided in the report states that solar energy, fuel cells and small wind turbines are eligible for a credit worth up to 30 percent of expenditures on clean energy-producing equipment, but the credit for CHP is more limited, applying to just 10 percent of expenditures for the first 15 MW of projects less than 50 MW in capacity. The credit does not apply to WHP. This past June, the POWER Act was introduced to ensure that CHP and WHP are treated in a manner fair to other energy technologies covered by the ITC.
ICF modeled the impact of achieving ITC for CHP and WHP through the POWER Act of 2015. Under the scenario, the updated credit would take effect for commissioned projects Jan. 1, 2017 and expire Dec. 31, 2018. The results show that overall CHP and WHP deployment could increase by 3.2 GW over the base case for a projected total of 21.5 GW installed between 2015 and 2013 with the help of a tax credit. CHP would account for three-quarters of this new capacity (15.1 GW) and WHP would grow by 6.4 GW.
Another scenario modeled by ICF was done using EPA&rsquo;s final rule assumptions for state-level carbon emissions standards and carbon prices, in which both CHP and WHP would be allowed to contribute without restriction to meeting the state emissions reductions goals for existing power plants laid out in the final Clean Power Plan. The scenario grants partial credit to CHP as an emissions control option, reflecting the underlying combustion of fossil fuels used initially to generate power before reuse. WHP, which simply captures waste heat, is allocated full credit. The ICF analysis, under this scenarios, projects that 19.6 GW of industrial energy efficiency could be deployed by 2030&mdash;13.4 GW of CHP and 6.2 GW of WHP.
The report concludes with an evaluation of the impact of key regulatory and legislative policies on the deployment of industrial energy efficiency technologies in order to help federal policymakers effectively encourage adoption of these systems. Pew commissioned ICF to model these policies and found that implementation of the U.S. EPA&rsquo;s Clean Power Plan and an improved federal investment tax credit could result in a 27 percent increase in adoption by 2030 with total capacity additions reaching 22.8 GW by 2030&mdash;16.1 GW CHP and 6.7 GW of WHP.
The results of this study will be presented at a briefing on Capitol Hill. Co-sponsors of the House bill, Reps. Tom Reed (R-NY) and Earl Blumenauer (D-OR) will be speaking about how the POWER Act can help achieve national economic, environmental and energy goals.
A full copy of the report can be downloaded from the Pew Charitable Trusts <a href="http://www.pewtrusts.org/~/media/assets/2015/10/cleanercheaperstronger_final_web.pdf?la=en" target="_blank">website</a>.

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The Pew Charitable Trusts has released a report that shows how an array of technological, competitive and market forces are changing how the U.S. generates power and the impact of national policy on the deployment of clean energy technologies.

Pew report examines changes to evolving US power grid

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