Industrial processes -- from petroleum refineries and paper mills to chemicals and metals industries -- consume about one-third of all energy produced in the United States. While the Energy Department is investing in advanced energy-saving technologies like carbon fiber and 3D printing, we also see great potential in more traditional technologies -- like combined heat and power (CHP) -- that strengthen U.S. manufacturing competitiveness, lower energy consumption and reduce harmful emissions.
Last August, President Obama directed federal agencies to help facilitate investments in industrial energy efficiency, such as CHP systems, that can save manufacturers as much as $100 billion in energy costs over the next decade. The President’s Executive Order established a new national goal of 40 gigawatts of new CHP capacity by 2020 -- a 50 percent increase from today. Meeting this goal would save American manufacturers and companies $10 billion each year, result in $40 to $80 billion in new capital investment in plants and facilities that would create American jobs and reduce emissions equivalent of taking 25 million cars off the road.
These efforts underscore President Obama’s goal of cutting energy waste from homes and businesses in half over the next two decades and accelerating the resurgence of American manufacturing, as announced in the State of the Union last month.
The Energy Department is already helping grow the market for CHP through its Regional Clean Energy Application Centers. These centers provide technical assistance to U.S. manufacturers, businesses, hospitals and universities to help them consider the business case for CHP investments. Since 2009, the centers have helped numerous organizations understand how CHP, waste heat to power and district energy can improve their bottom lines, lower energy bills and help protect our air and water.
The Northeast Clean Energy Application Center partnered with Simonds International -- the third largest metal cutter in the world -- to install a 1.8 megawatt (MW) CHP system at its Fitchburg, Massachusetts, plant. Simonds hopes to get nearly 100 percent of its electrical needs from the CHP system -- lowering its $0.16/kWh utility bill, while using the thermal energy for building heating and cooling.
"The installation of the CHP cogeneration system at our Fitchburg, MA, plant has changed our competitive cost position, dramatically enabling the company to retain energy intensive manufacturing operations and to consider adding new operations in the future. The project is a win-win as it is good for the company, our employees and the economic health of North Central Massachusetts,” said Ray Martino, President and CEO of Simonds.
North Carolina State University also recently achieved energy and cost savings as part of a joint project with the Southeast Clean Energy Application Center and Ameresco. The project helped install two new CHP units totaling 11 MW and a new 2,000-ton chiller along with other energy efficiency upgrades across campus. The new CHP system will supply 30 percent of the north campus’s peak power demand, reducing purchased electricity and saving the university more than $100 million over the next 20 years.
The President’s Executive Order on industrial energy efficiency also directed federal agencies, including the Energy Department, to convene ongoing regional workshops to help overcome barriers to expanded CHP investment. These workshops focus on developing and implementing state best practice policies and investment models that unlock new opportunities in industrial energy efficiency and CHP. Over the past year, we’ve held workshops in Columbus and Little Rock, and today we are holding another workshop in Baltimore.
Additionally, we’re expanding our technical assistance reach with $11 million over the next four years to support several regional Combined Heat and Power Technical Assistance Partnerships across the country -- the next generation Regional Clean Energy Application Centers. These organizations will provide fact-based information on CHP technologies and project financing to commercial and industrial businesses as well as state agencies, electric and gas utilities and trade associations.
Visit the Advanced Manufacturing Office website to learn more about CHP technology and the Energy Department’s partnerships.