The Ugly Stepsister - Cogeneration

(2/15/2009) - When most people talk about clean or renewable energy (including myself), they are usually talking about generating electricity from kinetic, light, or heat energy found in nature (I’m going to ignore biofuels for this discussion).  Solar, wind, geothermal, tidal, hydroelectric – these are the poster children of clean energy. 

Another oft-mentioned “source” of clean energy is efficiency.  By using less energy to perform any given task, we can prevent the release of greenhouse gases without sacrificing our status quo lifestyles.  Though some level of sacrifice will be necessary barring important technological breakthroughs, efficiency is a low hanging fruit that offers a good return on investment.

Cogeneration, which consists of “recycling” excess energy (usually heat) to produce electricity, is efficiency’s ugly stepsister - not "green," but very useful.  The Toyota Prius is one of the best known examples of what cogeneration can do.  When the car breaks, it converts some of the kinetic energy from its movement into electricity. 

The biggest opportunity for cogeneration is not in cars, but in factories and other large industrial plants that aren't the poster children of environmentalism.  Excess energy released during normal industrial processes can be captured and used for any number of processes.  In some places, excess heat is used to boil water and create steam, which in turn drives a turbine to create electricity.  In New York City, steam from nearby power stations is carried into Manhattan via underground tunnels and is used to heat, cool, or supply power to buildings. 

While cogeneration is not strictly “clean” since the energy is produced from burning fossil fuels, cogeneration provides useable energy without increasing greenhouse gas outputs. 

According to the Environmental Protection Agency (EPA) and the Department of Energy (DOE), the U.S. industries have the potential to add 200,000 megawatts of power generation capacity through cogeneration.  According to NPR, that’s enough to produce almost 20 percent of what the U.S. uses, “enough electricity to replace up to 400 coal-fired power plants.”  The DOE reports that about eight percent of the nation’s electricity comes from energy recycling, meaning almost 60% of industrial energy “waste” goes unutilized.  

There are several explanations for this gap.  Utilities in the United States are by and large government-enforced monopolies that accept heavy regulation for market dominance.  This is why there’s usually only one option for which company to purchase your electricity from.  These companies are protective of their monopoly position.  As a result, utilities refuse to buy excess electricity generated from small producers, or will accept power without providing adequate compensation to smaller producers.  Tom Casten, the president of Recycled Energy Development, told NPR that government regulations imposed by the Clean Air Act prevent utilities from recycling energy at older power plants because upgrades will make the entire facilities subject to newer regulations.  And in some cases, factory owners might not have thought it ecnomical or worth the investment to install cogeneration capacity.

Utility protectionism isn’t just a problem for co-generators.  These rules also make it harder for businesses and private residents from producing their own power with solar PV or micro-wind turbines.  In some places, such as California, state regulators have turned the tables.  There, regulators enforce feed-in tariffs, which oblige utilities to not only buy clean energy, but buy it at inflated, government determined prices.  While I would prefer governments tax or cap and trade carbon instead of price-fix renewables, this type of policy is an improvement.

Promoting cogeneration is probably most important in countries that are now building their industrial infrastructure.  If Nigeria, India, Kazakhstan, China, and others begin promoting cogeneration now, and build their infrastructure with it in mind, this will pay dividends for their economies and the world’s atmosphere for years to come.  Those that are located in cold climates are also in a position to build new residential buildings near power stations so that steam can be used for heating, a la New York City.  This is harder to do in the United States, as much of our infrastructure is already developed, and the NIMBYs have kept power generation and populations separate.

Finally, cogeneration has the advantage of producing electricity close to where it is used.  Transporting electric power across long distances with high voltage lines results in energy losses of 5-10%.  Producing electricity onsite will eliminate these loses for energy that is also consumed onsite, and reduced for electricity that is transported to homes or businesses nearby.  On the aggregate, I believe that industrial facilities tend to be placed closer to population centers than power plants.

(Image by frankh, of a cogeneration plant at MIT)