Biomass may benefit from Obama's industrial CHP Executive Order

By Anna Simet | September 04, 2012

In conjunction with the release of a U.S. DOE report on the state of the U.S. combined-heat-and-power (CHP) industry, U.S. President Barack Obama has made an Executive Order to facilitate investments in energy efficiency at industrial facilities, which focuses on expanding the use of CHP.

The order directs federal agency coordination to achieve a national goal of deploying 40 gigawatts (GW) of industrial CHP in the U.S. by the end of 2020. Agencies to be involved include the U.S. DOE, U.S. Department of Commerce, USDA and U.S. EPA, in coordination with the National Economic Council, the Domestic Policy Council, the Council on Environmental Quality and the Office of Science and Technology Policy. The aforementioned agencies, according to the order, will coordinate policies to encourage investment in industrial efficiency in order to reduce costs for industrial users, improve U.S. competitiveness, create jobs and reduce air pollution.

States, industrial companies, utility companies and other stakeholders will be engaged during the process in order to accelerate investment. One specific initiative will be convening stakeholders, through a series of public workshops, to develop and encourage the use of best practice state policies and investment models that address the multiple barriers to investment in industrial energy efficiency and CHP.

According to the DOE report released along with the Executive Order, “Combined Heat and Power, a Clean Energy Solution,” CHP is vastly underutilized in the U.S., currently representing approximately 8 percent of U.S. generating capacity. In countries such as Denmark, Finland and the Netherlands, CHP utilization exceeds 30 percent.

If the goal of Installing an additional 40 GW of CHP—about 50 percent more than the current levels of U.S. CHP capacity—is reached, it would save approximately one quadrillion Btus of energy annually, according to the report. It would also eliminate the equivalent of emissions from over 25 million cars, save energy users $10 billion a year relative to their existing energy sources, and result in $40-80 billion in new capital investment in manufacturing and other U.S. facilities over the next decade.

The report indicates that natural gas is by far the most common CHP fuel at 72 percent, but biomass, process wastes and coal make up the remaining fuel mix. As of 2011, approximately 500 biomass-fueled CHP units were in operation across 44 states, according to an ICF International CHP installation database.

Mathew McArdle, vice chair of the New York Biomass Energy Alliance board of directors, said the Executive Order presents a great opportunity for the biomass energy industry in New York to tap new markets for biomass-powered CHP. This includes manufacturing facilities with no access to inexpensive natural gas that are not only spending a large portion of revenue on heat, space and process heat, but also on electricity, McArdle said.

The Biomass Thermal Energy Council also expressed support of the Executive Order, stating it recognizes the often overlooked benefits of harnessing thermal energy in the U.S. industrial sector. “Fueling CHP applications with renewable, locally produced, and sustainable biomass fuels from our fields and forests and will aid the dual goals of energy and economic security,” said BTEC Executive Director Joseph Seymour. “BTEC and its members look forward to working with federal agencies to meet the order's goal."

Read the Executive Order here