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CHP Market Overview



Combined heat and power (CHP) is an efficient and clean approach to generating electric power and useful thermal energy from a single fuel source. Instead of purchasing electricity from the distribution grid and burning fuel in an on-site furnace or boiler to produce thermal energy, an industrial or commercial facility can use CHP to provide both energy services in one energy-efficient step.


The average efficiency of power generation in the United States has remained at 34 percent since the 1960s. CHP captures this waste energy and uses it to provide heating and cooling to factories and businesses, saving them money and improving the environment.


The U.S. currently has an installed capacity of 82 GW of CHP, with 87 percent in manufacturing plants around the country. CHP currently represents approximately 8 percent of U.S. generating capacity compared to over 30 percent in countries such as Denmark, Finland and the Netherlands.  CHP, or cogeneration, has been around in one form or another for more than 100 years — it is a proven commercial technology. Despite this track record, CHP remains underutilized in the U.S., even though it is one of the most compelling sources of efficient generation that could, with even modest investments, move the nation quickly toward greater energy security and a cleaner environment. 


As an efficiency technology, CHP helps makes businesses more competitive by lowering their energy costs, reducing demand on the electricity delivery system, reducing strain on the electric grid, and reducing greenhouse gas (GHG) and other harmful emissions. Already used by many industrial facilities and a growing number of commercial and institutional entities, CHP is a commercially available clean energy resource that is immediately deployable, and that can help address current and future U.S. energy needs. 

Cost-effective, clean CHP can provide a suite of benefits to both the user and to the nation:


Benefits of CHP for U.S. businesses

  • Reduces energy costs for the user

  • Reduces risk of electric grid disruptions and enhances energy reliability

  • Provides stability in the face of uncertain electricity prices


Benefits of CHP for the Nation

  • Improves U.S. manufacturing competitiveness

  • Offers a low-cost approach to new electricity generation capacity 

  • Provides an immediate path to lower GHG emissions through increased energy efficiency

  • Lessens the need for new transmission and distribution (T&D) infrastructure and enhances power grid security

  • Uses abundant clean domestic energy sources

  • Uses highly skilled American labor and American technology



Source: Combined Heat and Power: A Clean Energy Solution - August 2012 - By U.S.  D.O.E. and E.P.A.

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